The Octagon was orignally an Orange Juice and fast food stand on the south side of Highway 140 between Briceburg and El Portal (closer to Briceburg). It's on the steep road that heads to the bottom of the Merced River Canyon. I don't know when it closed, but my guess was the 1980s or maybe 1970s. It's still there--recently repainted bright orange and a 8-side concrete slab fast food drive-in type joint (but still closed). Here's a photo:
http://www.mariposaresearch.net/octagon.html
The swimming hole by the name of "The Octagon" is on Bear Creek below the fast food Octagon. I found this reference at this link
http://www.supertopo.com/climbingareas/yosemite.html
What do you do when Valley temperatures hit the 90's? Head for the water. . . . If you are willing to drive 40 minutes, there are two great swimming holes outside of the Park boundaries. About ten miles west of the Highway 120 entrance station, take a left immediately after a large bridge. Here you will have your choice of jumping off 15-25' cliffs or just kicking back next to the water. About 15 miles west of the Highway 140 entrance station is the Octagon, which features a rope swing, sketchy cliff and tree jumps and great spots to kick back and have a BBQ. The directions to this place are more devious so you will have to hunt down a local Yosemite climber for info.