To unlock this area, you need to complete the "Restoration" mission. The bridge built thanks to your help will lead you to Driftwood.
After entering the location go straight to the lake shore and turn west . On the left you will find a path between the rocks which will lead you to the Gnome .
On the third island from the shore go right until you see a lonely house . Stand behind it and swim to the fragment of land visible on the left. The Gnome is sitting on one of the rocks .