I'm thinking, if it is that, it's buried under the red meadow. Apparently if one dies and its head is buried, that soil becomes good to grow in. May somewhat explain where those red plants come from. It's some sort of a dragon. Eating its skin heals the wound of love- and if traditional christianity is anything to go by, Nick may still feel the pain of falling out of favor with the Big Guy. And eating it's heart gives a heck of a lot of courage.