The Gnoll is called Stoolie and he is covered in grass and other rotted vegetation. He is one of Carrot's regular informants. Stoolie (short for Stoolpigeon, which is of course another meaning of the word "grass" or "informer") gives Carrot a useful lead to the whereabouts of one "Snowy" Slopes, who may be able to help the Watch with their inquiries following an assassination attempt on the Klatchian ambassador, Prince Khufurah.
Stoolie's informant fee is remarkably cheap: a dead seagull that Carrot has observed to be lying unattended in Brewer Street.
Incredibly obviously, this is a slyly inserted reference to the grassy knoll (a small hill for readers for whom English is a second language) in Roundworld's America which forms the basis for the entire conspiracy theory around who actually shot JFK. As the whole of this book is about who engineers the assassination attempt on Khufurah's life, it is a remarkably apt reference.