I gathered a huge crew (overloaded my ship - people couldn't row out anymore and had to TP to me) and set shifts for them to wait on the ship while others did other things. We all returned to the ship with 5 minutes left, recrewed, stocked ammo, and grabbed cannons. When the ship timer went to 0... (big surprise effect)...
Duh duh duh duh....
(trumpet sound)
Nothing! My ship just sunk and no Kraken appeared. So before you go and gather a massive crew and spend an hour on your ship, remember this post. I sent a bug report to PotCO about the problem (on Test server there was a Kraken) so I'll update the thread if they say they change this procedure. Otherwise, there you go!
Now I can no longer be called a landlubber.