I'm just skimming through the Octopus source now, and it seems it puts a proxy in place of the usual connection object. So I guess the short answer right now is that Thinking Sphinx does not work with Octopus, I'm afraid.
To some extent, I'm happy to keep TS playing nicely with other libraries, but it's difficult in this case, given Octopus replaces ActiveRecord internal objects.
There's no manual way to set the database settings for TS - this isn't something that gets asked for much. If you want to fork and patch, I'd definitely consider merging it in.
Sorry I don't have happier news for you.
--
Pat
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Jeremy