Although it might be disturbing, these interpretations are very interesting... there are thousands of them on the web, each with their different tweaks and changes. My favorite would be the spongebob theory, that he may have been a result of nuclear experiments, because apparently, "Bikini Bottom" is a reference to an old testing area for nuclear weapons, called Bikini Atoll, where several nuclear bombs were tested and dropped into the sea. They all used to be normal sea creatures that is until the nuclear bombs were dropped, leading to deformations like talking squids and sponges, and giant pineapples growing underwater. It can be seen that sometimes these images of explosions at Bikini Atoll were used (like the Exploding Pie episode, when spongebob accidentally drops it on Squidward) and sometimes when the city is introduced, it looks like it's in a crater... I don't know, but that's my favorite one so far