Urban Legend: Killer anti-terrorist dolphins were released by hurricane Katrina

Status: Probably not.
The winner for “Most bizarre rumor to come out of Hurricane Katrina” so far is the above-cited Observer report that a group of killer dolphins armed with “toxic dart” guns, and trained by the U.S. Navy to track down and immobilize spies and terrorists, was washed out to sea in the Gulf of Mexico by the storm. The cetaceans are now missing and presumed to be armed and dangerous, at least according to rumor.
The Observer article is located here:
http://observer.guardian.co.uk/international/story/0,6903,1577753,00.html
The sole source for this story seems to be the above-mentioned Mr. Sheridan, whose validity as an information source is dubious at best.
Urban Legends Reference Pages: Hurricane Katrina (Killer Dolphins)