Well, having done what I posted earlier, with no scared neighbors or dog related shootings. Although some of the neighbors may have secretly been rooting for me to shoot the dog, I don't know. The dog seemed a bit confused by it all, but it and other things put up with my strange behavior for the time I was out there. My other dog Lilly thought it was fun I think watching me throw sticks around the yard to get Merlin to move around so I could try to re-acquire him in the scope. (firearm empty with bolt removed for safety) ...
I am forced to come to the conclusion that an 8x32 power scope would be a bit too much for Coyote hunting, particularly here in Indiana. It may work out well out West where the shots would be longer, and the country more open, but here if the target was to start wondering around, re-acquiring the target with no more field of view then I would have, would be difficult to say the least. I don't know if I could ever get used to it, but I bet in trying to I would find myself saying "Which way did it go?" quite a bit. So, I may have to rethink that... Not that I'm looking to take running shots, but they would be near impossible at a fairly close range. 8x32 may be good for target, bad for hunting at least in my case I think.
I did try the same experiment with the scope set on 6x, and found it to be better but still difficult. But, I have done some research and most of the T.V. show Coyote hunters seem to prefer a 6x24, or something very close to that. A 6x24 would increase my lower power range by only 2, but would literally double my high power range from 12x to 24x. So, that may be a good trade off...
I also set my scope to 4x of course just to show myself the difference... It is easiest of the three settings to locate moving objects of course, and I do know where I can get a brand new 4x18 scope for less than $50. That would give me the same low power as my 4x12, but obviously give me a gain of 6x on the high end, and I could keep the 4x12 scope on the rifle it's on even if I don't end up keeping the rifle.
So... there you are. I guess I'll sleep on it tonight and act on it tomorrow... Unless of course someone posts on here and talks me into something else.

Thanks though for those of you who brought me back to reality that I already knew, but didn't want to hear. :bleh: