Can a player polymorphed as a hydra grapple a foe with each head?

Question

Player A has improved grapple and polymorphs into a 7 HD hydra. If he takes a full attack action, can he grapple 7 enemies simultaneously? Things to consider:

1. Once grappling, a player threatens no squares, but are all actions are happening at once and/or does a player need to threaten squares to actively attack them?
2. Only up to four creatures can join a grapple on a single creature, but does that stop a single creature from initiating a grapple on over four creatures?

To clarify: the player is not looking to bite for damage and then grapple. He simply wants to use standard grapple rules and initiate 7 grapples via touch attacks.

Answer 1

No, not without Improved Grab, which the 3.5e hydra does not have.

The creature has the option to conduct the grapple normally, or simply use the part of its body it used in the improved grab to hold the opponent. If it chooses to do the latter, it takes a –20 penalty on grapple checks, but is not considered grappled itself; the creature does not lose its Dexterity bonus to AC, still threatens an area, and can use its remaining attacks against other opponents.

Without Improved Grab, the hydra still has to use its limbs to maintain a grapple - it can initiate a grapple with a converted bite attack, but the grappling itself is more than just the bite (unless it has Improved Grab). Once the hydra begins a grapple, it can no longer use its remaining attacks against other opponents.

To put it another way, without Improved Grab, the attacker will lose all remaining attacks except those permissible under the "If You Are Grappling" section of the Grappling Rules after the first grapple hits and cease to threaten squares due to being in a grapple. The "If You Are Grappling" options limit you to attacks only against a target you are grappling.