After the sequence with Fug running along the prison cells screaming "Fug gonna finish this. Fug make you sorry!", kill him and the other hunter that comes downstairs. They go up the stairs. Once you are on the prison floor turn left and you will see a room on the other side of the bars. In this room is a shotgun. The shotgun only appears when you bring Starkweather the head of the man whose body you are supposed to take to the guard room on the Mouth Of Madness level. This is the secret gift he leaves for you in the next location.