Alex and Allison are on the right path - I just learned that the small Hawaii octopus is a relative of marginatus, and it was described in 2005 and named Amphioctopus arenicola by Christine Huffard & F.G. Hochberg of University of California at Berkeley and Santa Barbara respectively. It is also known as short-armed sand octopus. Ms. Huffard's email to me follows:
Hi Jerry,
Great to hear from you. Yes- I recognize the picture- a fantastic one. This is indeed Amphioctopus arenicola. We got the description out just weeks too late to get the name into Hoover's Inverts field guide. Compared to other night-active octos in Hawaii you can most easily identify A. arenicola by its fairly short arms, tan color with dark scribbles in the grooves of the skin, granular skin, unbranched skin flaps (papillae) on the body, and habitat. Just like you observed they do bury into the sand. They're relatives with the coconut octopus, although I haven't been able to get them to walk, but keep an eye out- you never know! There's also a long-armed sand octopus that's active at night, but we've found this on open sand in deeper waters (about a 45 min surface swim out from far Kahe). Based on the few I've found, A. arenicola likes grainier sand with a little rubbles/pebbles- the same habitat as the stomatopod Odontodactylus brevirostrus. We're still working on getting enough specimens to describe the long armed sand octo. It's proving to be an elusive beast.
Happy diving and feel free to drop an email any time you have questions about Hawaiian octos!
Take care,
Crissy