I am playing on casual mode, and I am having difficulty beating this guy. The level is very dark, so I have trouble seeing all of the other monsters that spawn, including the tentacles. Since you can't create light AND shoot, I end up just running around and shooting what's in front of me, but that doesn't last long.

There doesn't seem to be an health on the level, so hiding in the cover spots only goes so far. Should I shoot all of the spawned monsters first or just go straight for the tentacles?

Set the graphic quality to "medium" so you can see stuff better (fix for the darkness bug on "high" should come with the next patch). Then definitely go for the small tentacles. The Great Old One will not take any damage until you have destroyed them all.

There should be health on the insides of the L-shaped walls around the Great Old One. And like Berzerk said, go for the small tentacles first.

/// spoilers ///
Yup Tentacles goes first, you can cheese the first one from the opening cave, then deal with the spawning enemies as they enter said cave.

Then you run to the opposite side and deal with the last tentacles. They pop up, shoot and then hide so just wait for them start charging their energy ball to shoot them out.

Then just shoot the poor old one till it dies :p I think I was aiming at his big eye.

/// end spoilers ///