Also, I'd keep the whole tentacle monster thing, but rather than setting it in space I like this better in a more standard fantasy setting. This would actually be a pretty good fantasy-meets-Cthulhu deal: the PCs start out thinking it's a run-of-the-mill goblin stomp, then suddenly, LOVECRAFTIAN HORROR.
The tentacle rape thing... not every group's going to be able to roll with that, but I like it a lot, especially the way it plays off of the slightly disturbing sexuality of the farmer's daughter. Here's a thought: the rapebeast has probably had its way with other victims in the area. Even if the PCs kill it, they could have to deal with its spawn. Perhaps Totoro is only the tip of the rapeberg, so to speak.