And here it is:

3 things that I tried to explain with this tile:
Firstly, I've figured that the green tentacle thing had to be some creatures tail (1), the dragon type lizard is actually the grown up verson of the slightly smaller lizard in the middle of the island. As you can see, it's a mom too

(2) Lastly, notice that the lizards grow darker and get bigger limbs as they mature. Then take a look at the big lizards hand. Look familiar? Grandpa is about to snatch himself a gnome on the right. (3)
I figure they're the gnomes natural enemy. Also made the first 'Knight gnome' (soon to be ripped apart I reckon *shrug*)
Had to match up 3 different ways of making rocks, and fitting a huge lizard in there with room for the kids was not easy. I guess the mountain extends at the back for that perspective to make sense. Was thinking of moving the eye that TakaM put on the mud monster/cave thing, but as it's not sure that we'll keep it, I just left it the way it was.
Well, enjoy and all.