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The Sasquatch Heart is an animal item found in Undead Nightmare. If the player kills a Sasquatch, they can then search the body for a Sasquatch Heart. Notice that the description of the item ("The heart of a forgotten soul") explains that the creature is simply misunderstood by mankind.
Sometimes, the player will not be given the loot prompt after killing a Sasquatch, thus not being able to loot the Sasquatch heart. It is said that reloading a save may fix this.