I have photoshop elements and use that primarily. Elements does everything you need for basic white balance/colour level adjustment. Its doesn't have some of the more advanced features (like focus stacking). Good value software.
The photo you posted shows distortion and loss of detail in the red portions. However, the detail and of the other portions (green and the tentacles) is there (and would be sharper with a tripod/timed release).
I don't think its glass distortion (with all due respect to Jason) because you would have distortion throughout.
I suspect that the red areas are overexposed and your camera's processing of the signal is distorting that into those "blotches" of red where there is complete loss of detail.
To give you an example - here is a shot I did in very low lighting (moonlights) with a long exposure. You can see how the yellow at the top of the sun coral sort of runs into each other.
IMG_3930
I would suggest the following to help isolate the issue.
1) Make sure you camera setting is capturing the images at the highest detail. In my canon (T1i) - its under quality and you pick the setting that gives you the largest file size. This will reduce the amount of compression (which introduces distortion)
2) Take a number of "stepped exposure shots"; i.e. take 3 photos - one as you would normally, one which is underexposed by 1 f/stop and another which is under exposed by 2 f/stops. See whether the underexposed shots solve your problem.
3) See if reducing the ISO setting will fix your problem. (from your shot I really don't think its an ISO problem otherwise the whole shot would be grainy).
Hope that helps!