Trout. I always find the Deschutes trout to be moody in August. Some days are just going to be bad, and there's not much you can do about it. Midday periods will be the toughest.
In the morning's you'll probably find some caddis and mayfly spinner falls in the backeddies. You can also pick up some trout on caddis patterns in bouldery areas and along the banks. Another approach is to use a size 18 or smaller Soft Hackle in slowish, bouler-strewn areas. Trout will probably turn off the instant the sun hits the water; they'll come back when they're in the shade again.
Small dead bugs are important at this time of year. Blue-winged olive spinners in size 18-20 and midge pupa patterns can be effective in the mornings; look for fish working foam lines, backeddies, and along steep banks.
Once the sun is high, go subsurface or use a dry fly/dropper rig (24-30 inch leader off the hook bend of the dry fly; tie a small nymph to it). Seek areas where trout have overhead cover: overhanging vegetation, frothy water, deeper pools, etc. Work nymphs down near the bottom in these areas. Or just give up until evening.
When the sun is on the water, you might pick up some trout on beetle or ant patterns. The Deschutes is not a "hopper" river, so forget whatever you learned in Montana in August.
In the evening, look for hatches of gray and ginger caddis. The former are about size 18 with gray bodies and gray wings; the latter are usually a size 16 with ginger wings and olive or brown bodies.
When imitating caddis, many anglers use an Elk Hair Caddis. Unless the water is rough, I like to trim the hackle on the bottom so the fly rides lower in the water. The Casanova Caddis is a good low-riding imitation. It's become a favorite of mine. The deer hair dubbing makes a realistic body, although it takes some practice to use that material correctly. The Raffia wing can be in shreds after half a dozen nice trout, but that's a small price to pay for half a dozen nice trout in August.
Pupa patterns, such as the Sparkle Pupa or Z Wing Caddis, fished near the bottom can also induce grabs throughout the morning and again in the evening. Late in the month, a good strategy is to cast a two-nymph rig with a stonefly nymph (Rubber Legs, Kaufmanns Stonefly, etc.) on the point and a size 16 caddis pupa (Sparkle Pupa, Soft Hackle, or equivalent) on a dropper. Early in the day, you'll pick up more trout on the stonefly nymph, but later in the day you'll get the majority of your trout on the pupa.
Sometimes you'll see huge numbers of the gray adult caddis clinging to the downstream side of mid-river rocks. If you spot this, tie on a gray size 16-18 Soft Hackle or Diving Caddis and present it with a surface swing downstream from where you see the caddis. Results can be awesome.
Hatches of midges are common at dusk. Carry a seine so you can check the size and color of whatever is drifting down the river. Midge fishing is best in quiet runs, in backeddies, and near rocky banks that create mini-eddies. You'll find whitefish feeding in the slackwater areas, and trout where there's more current; sometimes only a couple of feet will separate the two species of fish. A midge pupa pattern is usually the best choice during a midge hatch, but sometimes a Griffiths Gnat will pick up fish. Use size 20-24 patterns.
You'll probably find a few pale evening duns still around, and maybe some blue-winged olives will show up in the late afternoon. Aquatic moths are another August event. You may also find trout taking craneflies at dusk.
If you're nymphing, bright flashy nymphs can be productive at this time of year. Copper Johns, Lightning Bugs, etc.; or just a Hares Ear doctored with some strands of Flashabou can be effective.
Trout often gather in the fast pocket water when it's hot because that water has lots of oxygen and the broken surface provides cover. You can fish nymphs in this water, but you'll need plenty of weight to get the fly near the bottom.
So that's trout fishing in August: a lot of little bugs, but no big hatches; and trout that will turn on and off (or just off) at a whim.
Steelhead. August steelheading can be inconsistent, too. Much depends on the relative temperature of the Columbia and Deschutes. If the Deschutes is cooler than the Columbia, steelhead will move into the Deschutes. If not, they won't. Sometimes the Columbia gets a thermal barrier between The Dalles and Bonneville dams, and steelhead just tuck into the deep pools until later in the year. If that happens, steelheading will get a late start on the Deschutes (and even later on the Grande Ronde). Check the fish counts over the Columbia River dams (http://www.fpc.org/adultsalmon/AdultCumulativeTable.asp). See how many fish have gone over Bonneville Dam, then check how many have gone over The Dalles Dam. If they haven't gone past The Dalles Dam, they won't be in the Deschutes.
We could have fishable numbers of steelhead in the Maupin area by the end of the month (or not), and maybe even a few fish above Trout Creek. Even if the temperature cools down, the bulk of the fish are going to be below Shears Falls until late in the month.
The best steelhead fishing will be in the early morning; evenings will be okay, but not quite as good as mornings. In the evening you'll have to contend with that strong up-canyon wind, which makes casting difficult. Mornings are usually calmer.
Evening water temperatures can be significantly higher than morning temps. Take a thermometer and measure the water. If it's over 70, don't fish.
For more on August tactics and flies, see the Rivers in General forecast