My three-and-a-half-year-old nephew wandered into the family room while we were watching this (he had been safely in the living room on the other side of the main floor of the house, playing with his wooden trains), and, predictably, was a bit upset at all the blood. (Which is why we had him over there playing trains in the first place.) So, with some quick thinking, we altered the plot for him: Sharktopus is a big ketchup fan, and is always looking for more ketchup. Every time he appeared onscreen, I did a silly voice: "Hey, does anybody have any ketchup? I'm all out of ketchup! Who has some more ketchup I could borrow?" Then, when Sharktopus was busy messily eviscerating his next victim, we'd make comments to the effect of, "Oh no, he spilled the ketchup all over! He's making a big mess with all that ketchup!"
End result: we got to see the rest of the movie, we dodged the nightmare bullet, and now he likes to play "Sharktopus looking for ketchup" with his toys.
Whew!
Johnathan