There are four Gnomes total hidden in some hard to find places throughout the game. There is one in each world. After collecting the first one, you will be given a side-quest “GnoMAD’s Gnomes” (For their locations, click on the relevant Gnome you’re after below).

$$$item 1617

$$$item 1618

$$$item 1619

$$$item 1620

View Full-size

Once all four have been found, you will recieve a message telling you to visit a Serpent Tome. Go to a Serpent tome and open the mail from GnoMAD to earn a new legendary item - GnoMAD Scythes. This will complete the quest.