I've gotten through proving this all the way to $\cfrac{K^2+K}{8}$, where $n=2K+1$. Since it says that $n^2-1$ is a multiple of 8, the result needs to be an integer, i.e, p (representing $K^2+K$) needs to be something like $2(K^2+K)$.
Is using $4K+1$ to represent n the only way to get around this? I'd prefer to use $2K+1$ because that's more obvious.
EDIT: My work
$(2k+1)^2-1=8j \\ 4k^2+4k+1-1=8j \\ 4k(k+1)=8j \\ 4(k^2+k)=8j \\ \cfrac{4(k^2+k)}{8}=j$
I realize I made a mistake with forgetting to divide 8 by 4. But still how does $\cfrac{(k^2+k)}{2}=j$ mean it's a multiple of 8?
$n = 2m + 1; \tag 1$
$n + 1 = 2m + 2; \tag 2$
$n - 1 = 2m; \tag 3$
$n^2 - 1 = (n + 1)(n - 1) = (2m + 2)(2m) = 4m(m + 1); \tag 4$
at least one of $m, m + 1$ is even; thus
$m(m + 1) = 2k; \tag 5$
then
$n^2 - 1 = 4(2k) = 8k \Longrightarrow 8 \mid n^2 - 1. \tag 6$