[Noxomanus]

For one,it's unknown wether it really was a squid or Kraken,and if it was it must have been a very remarkable one. It lives in fresh water and seems to have a mind of it's own.

I suspect it's more right to say nothing beyond that it was a Monster,perhaps one of the Nameless Things Gandalf speaks off.

Sure,a bazooka could do a nice job I guess,but to stay within the reach of ME people..I think using one of Sarumans explosive devices to let rocks fall down from the mountainwall on the lake would be a possibility. Otherwise, making the lake empty would be a possible,and better,alternative.

My nature-loving mind however tells me I'd rather have the creature be left alone, special, and perhaps even unique,as it is.