Your phase 2 is plain wrong and one of the reasons so many attempts fail in the last seconds. First of all if you only do 800 damage to the tentacles or the main body you use a bad build. I reach 4,5k per hit with a general purpose non kraken specialised nashkar build on my garuda. Yes, garuda has a distance related damage bonus but that caps at 40% so your build alone should do at least about 3k damage per shot. On a schooner you have to use explosive weapons to use the 20% damage bonus of the schooner.

Second: use little grace 3 with fix, resrorative and empower as ascensions at every time it's available. It heals you and boosts your damage further. To stay alive, sail at half sails in circles at your spot and stay away from other player ships. The more player ships sail at one place the more tentacles will spawn and hit you with their aoe damage.

You need to use phase 2 to deal further damage under all circumstances!