Deep Space Kraken
The Deep Space Kraken is a bug in the game that is experienced in deep space. It is an error with the games physics engine, PhysX, which attacks spaceships as their velocity increases. The number of parts in your ship has a large effect on what speed the Kraken Manifests itself, as well as how much it affects your ship. It primarily causes your craft to go off trajectory due to forces that shouldn't be there.
The cause of this bug is extreme velocity; the bug subtly exists even in Kerbin orbit. It is mostly only noticeably experienced in Kerbol orbit, however, due to velocity you "gain" when you transition SOI to Kerbol. A fix was implemented in 0.17, involving offloading velocity to the universe around you meaning that the focused vessel will always be at a somewhat low speed. However, the same bug under a new name, the space Cthulhu, can break apart ships when quickly warping out of high time accelerations (as of 0.17). It has been reported that Cthulhu can attack ships that are still on the launch pad when coming out of a high time warp.
Deep Space Cthulhu
Deep Space Cthulhu is a fan-made term for a Version 0.17 bug similar to the Kraken, except it only seems to attack when exiting high warp speeds. Instead of adding phantom forces, Deep Space Cthulhu instead tends to detach all parts from one another. In milder, yet more infuriating forms, Deep Space Cthulhu will instead detach small groups of engines, making it impossible to perform orbital burns.