The Bowerstone Old Quarter gnomes in Fable III are two of the 50 gnomes you must shoot in order to complete the "Gnomes Are Evil" side-quest. To begin this quest, you mist first finish the "Gnomes Are Great" side-quest early in the game. After leaving town, you'll go back and talk to Jonathan. He hangs out near Brightwall Academy, and he'll tell you that the gnomes have escaped.
The first Bowerstone Old Quarter gnome is located two doors down from the main entrance. (From Fable III) At this point you can quest for the escaped gnomes by listening for their tiny evil voices. Return to Jonathan after shooting all 50 gnomes to collect your reward.
There are two gnomes in Bowerstone Old Quarter.
1. The first gnome can be found near the main gate. Enter through that gate and find the second house on your right. It's named House of Stains and the gnome will be on the chimney on the right.
2. To find the second gnome, go up the hill past the stalls. You'll find the gnome to the right of the small steps on the side of a house.
It might help to watch this video to see exactly where they're at.
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