He's in the second "chapter" of the Dark Carnival campaign. Once you get into the actual carnival, on the right hand side there will be a "Peanut Gallery". Score 750 points or more (having teammates help is a plus), and a prize box will open on the left hand side, revealing Chompski. Carry him all the way to the end of the campaign and the achievement is yours.
Note: Once the campaign is finished with the gnome in the chopper, everyone gets the achievement. So you don't have to worry about doing this over and over again for each person.