*(Migrated from a comment.)*  

If you can get Octave to work in the terminal but not in Emacs, it may be a problem with Emacs getting access to your OSX path.  See [this answer](http://emacs.stackexchange.com/a/10737/253), which suggests installing the [`exec-path-from-shell`](https://github.com/purcell/exec-path-from-shell) package to deal with that problem (which you can do via the Emacs package manager: `M-x list-packages`).