Do you recall which thread/post someone told you that using fresh seawater would mean you didn't have to cycle? It wasn't the locked thread started by alexfevry, was it?
Some public aquariums and science labs have "flow-through" systems where fresh seawater is constantly being pumped into the tanks and old water is pumped out. These don't need to cycle because they don't have bio-filters: all the ammonia that is produced by the animals gets pumped out into the ocean before it can hurt them. Perhaps you were confusing this with getting seawater for a home tank?
How long has your tank been set up? Is this the system that you've only had set up for a week or two or is it your old tank?
Here's what I'd do. Test ammonia and nitrite every day. If the values of either are more than a trace for more than a day you should really let the octo go for its own health.
When something like this happens, the first instinct is to do water changes. Obviously, it will get rid of some of the ammonia and make the water safer for the animal. This is kind of a mixed bag though, because when the tank is still cycling water changes will make the cycle take longer. The choice is between a shorter, bigger ammonia spike (which will probably kill the animal) or a long, drawn out period of lesser amounts of ammonia (which is cruel to the animal--take the lid off a bottle of ammonia cleaner and take a big whiff if you don't believe me). You're lucky because you can catch and release as you please. If your tank isn't ready and your ammonia/nitrite start rising your octo doesn't have to be punished. Others though might have paid big $$$ for their octo and if they were unprepared the animal can die (This happened to someone over the summer).
If the tank has been set up for a couple weeks you might get lucky and the cycle is nearing its end. The cycle usually only takes a few weeks, we recommend 6-8 weeks only because there are other less critical things going on in the background. Since you're reading nitrite but not ammonia I have a hunch this might be what's happening. You might hold tight for now, then keep testing those two parameters and see if they start rising. If they do, let him go and catch another in a few weeks. If they don't, then you can breathe a sigh of relief
Dan
(and by the way, you probably shouldn't try breathing the ammonia. It might do really really really bad things to your brain and your lungs!)