Alright, taking another crack at this. Leveling up outside of the caves is nearly unbearable, the most Exp. there is to be had is 100 for the three characters and the battles themselves take upwards to a minute due to what nees to be done.
Tip: Tellah is not worth gaining levels for. Gaining levels for Rydia is worth your time outside. It helps a lot if you grind Cecil solo before getting Rydia (if possible)
Cecil is currently at 17 and Rydia at 14. Now I've gone back to fighting OctoVamp. Things I've learned...
Only when you first start the fight (and whittle down his arms) will he not counterattack Everything with Drain (but Lit which he counterattacks with several deadly Lits himself than a Drain). Though at that time the only things that can even pretend to damage him are Magic Fists and the Shadow sword (strangely enough) everything else does 1 Damage and ordinarily ends in a bad counterattack.
Chocobo is a better solution. It has a stronger magic power base. Rydia needs to be @ level 15... she'll then have a chance to evade Drain (Rydia gets the magic defense multiplier). At some point Chocobo won't be an option, so you are better off trying to get Rydia to straight up heal.
When you've "whittled him down" is when the fight is basically lost. With Blink on everyone he can't easily get through physical attacks but that doesn't matter when everything you do is met with Drain.
With the Darkness Sword Cecil does 53-100 damage to him, which is drained back up for anywhere from 80-120 damage. So Bacchus Wine is a necessity. When applied Cecil does anywhere from 70-205 damage, (205 being crits and the like) but the drains still seem to make that a largely futile effort.
Cecil needs the levels. If his attack multiplier doesn't get where it needs to be (somewhere around level 15 or above), then it's not going to be pretty.
And why is it exactly that Cecil continues to miss so much against this guy? As far as I'm aware the Darkness Sword's Accuracy is still pretty good and I saw that weird move that OctoMammoth does when you get rid of all of his Tentacles but it doesn't seem to do anything, just to be safe I used Eyedrops and a UniHorn, but to no avail. Why exactly at this point in the battle is OctoVamp this untouchable?
Instead of making the monster "get worse" (moving slower), it gets better. The monster gets increasing defensive + agility stats as you change it, minimalizing the damage you are dealing to it. It also gets evasion.. the same stuff used by Cagnazzo (shell mode) + Valvalis (spin mode) in their battle scripts.
As I said before, I made it much further than this once upon a time and had little qualms with this particular part. Are you certain this fellow is acting as intended? Or am I just missing something so simple?
As I've said before... the earlier version has a greater magic multiplier (2) with the default Drain magic power (64). The current version has a weaker magic multiplier (1) with the FF4ET Drain magic power (80). I'm pretty sure that this more current version had been "nerfed" unless there's some other fact that I had not considered. I could nerf the Drain hit rate if that were the issue, but that would be as far as I'd go with that.

I'd probably need to recall which older version had the older stats... to be sure.
Did you at least pick up some Healing Staffs from the Zombies? That is supposed to make the healing-damage issue bearable. Also, Silver Rings are the common drops from the TinyMages. That will help out in the magic evasion... Also... did you remember to buy the Cloth? There's a tradeoff that's probably worth taking.

Here's another thought... the original Octomammoth reacts to change from taking damage.. so you could arguably skip many steps or advance the monster's state by dealing crap for damage. The same concept applies here. The idea is to deal as much damage as you possibly can before he reaches his final state. I get the feeling you may be advancing the monster too quickly.