This is the pineal gland of someone who died from a strange infection that swept the community, and then was brought back to life as a walking corpse. If you don't know where on the body the pineal gland comes from, I'm certainly not going to tell you.
Since the drop locations are no longer accessible, this item can no longer be obtained except through the mall.
It has been stated by Riff that this item one day might turn up in the game again, but that the supply available via the mall would have to drop significantly before such an action would be considered. [1]
Second prize in The Raffle House on January 9th, 10th, 24th, 28th, February 10th and 13th of 2008.
References
The pineal gland is found near the center of the brain, just above the superior colliculus. It is believed by some (hippies) to have mystical powers.
Descartes wrote that the pineal gland might play some important role in consciousness, which was one of the earliest speculations in the Philosophy of Mind. Also within the purview of the Philosophy of Mind is is the Zombie Hypothesis, which posits the existence of human beings who behave exactly like we do, but have no consciousness (and are thus, Philosophical zombies). This makes the notion of a "zombie pineal gland" an ironic combination of Philosophical concepts that suggests "the consciousness of something without consciousness."
In the notorious movie Plan 9 From Outer Space, zombies are created in part by zapping corpses' pineal glands with electricity.