In this level, you have to kill the smiley hunter on the tower and bring his body to the guard room. Kill the hunter on the tower and make sure to cut off his head. However, do not bring his body to the guard room (just his head). An intermission sequence will show you entering the guard room with only the head. Starkweather will say "For bringing this head I will leave you a little gift in the next location". Look around for the unknown item.