Ok, new attempt using your input:
Zargon (Tentacled Horror)
CR 12(?)
Huge Aberration
HD 16d8+70+16 (168 hp)
Init +3
Spd 30 ft
AC: 25 (+3 DEX; -2 Size; +14 NA)
Bab/Grapple: +12/+28 (+8 size,+8 STR)
Full attack: 6 tentacles(+18/1d8+8), bite (+16/2d6+4)
Size/Reach 15/15
SA: Improved Grab, Constrict (1d8+8), Power Grapple, Fling Opponent, Hostage Shield, Dispelling Roar, Vampiric Bite
SQ Tremorsense, Darkvision 60', Immune to poison, acid resistance 10, fire resistance 10, electricity resistance 10, cold resistance 10
AL: CE
DR: 10/good
Saves: Will +13;Ref +10;Fort+10
STR 26 DEX 16 CON 20 INT 14 WIS 16 CHA 14
Feats: Power Attack, Multiattack, Lighting Reflexes, Combat Reflexes, Improved Trip, Improved Thoughness
Skills: Bluff +13, Intimidate +25, Knowledge (Arcana) +14, Listen +15, Sense Motive +17, Spot +15
Changes made from the original:
Dropped SR, Added DR 10/good
Gave it Combat Reflexes, Improved Trip and Improved Toughness. Removed Cleave and Greater Cleave.
Increased DEX to 16, dropped CHA to 14(is that about right? I'm terrible with stat math)
Added these (slightly changed) suggested/new abilities:
Fling Opponent (Ex): In place of a tentacle attack, Zargon can hurl a pinned opponent at another opponent whom it currently does not grapple. Treat this as a ranged touch attack with a range increment of 10' (starting at Zargon's normal reach of 15'). This ends the grapple with the pinned opponent. Both the pinned opponent and the target of this attack take 2d6+16 points of damage from the impact and end up prone. The target of this attack can attempt a Reflex save (DC 26 [Str based DC]) for half damage and to avoid being knocked prone.
Power Grapple (Ex): If Zargon uses two tentacles to grapple an opponent, the penalty for holding the creature is negated (he doesn't take the -20 to not be considered grappling himself).
Hostage Shield (Ex): Whenever Zargon is pinning an opponent, as an immediate action, it can negate a single successful attack (melee or ranged) against itself and redirect it at the pinned opponent, who suffers the full normal effect of the attack. Only one pinned opponent can be used as a hostage shield.
Dispelling Roar (Su): As a standard action, Zargon can emit a supernatural roar that functions like a targetted dispel on any creature and object within the 20' cone. Zargon only uses this when it is hindered by magical effects its normal attacks cannot cope with, since it means giving up all other attacks.
Edit: Forgot to assign a caster level. Dispel magic has maximum of +10, so that should suffice.
Vampiric Horn (Su): If Zargon has taken damage, it can bring any pinned opponent up to its horn and drain life energy. This requires a successfull grapple check to move the opponent into position. It then drains 1d12+2 (CHA bonus) hp from the opponent, which are directly used to heal his wounds. Zargon cannot use this ability to gain more than his maximum number of hitpoints.
Edit: forgot about possible sunder attempts:
The tentacles of Zargon can be sundered similar to those of the Kraken or the necks of the Hydra.
Sundering a tentacle provokes an attack of oppertunity (unless the attacker has improved sunder).
Each tentacle has 20 hp (don't forget the DR 10/good that must also be bypassed). Damage to the tentacle is not counted against Zargons hp until the tentacle is sundered. If Zargon looses a tentacle, it takes 10 hp of damage.
A sundered tentacle remains alive for 10 minutes after being seperated from Zargon. Treat as Medium Constrictor Snake without a bite attack. If the tentacle takes an additional 19 points of damage or more (standard hp for the snake) it stops moving.
If Zargon looses a Foot Tentacle (forgot to mention. It has 6 arm tentacles AND 6 foot tentacles. It cannot attack with the foot tentacles....) it's speed is reduced by 5'.
So, what do you think? Better? Or still too low for a CR12?