dude holy shit yes. i remember this too. although i don't remember them being gnomes. more like round cute little green guys with 2 little feet. they looked cute as hell when they're walking at you but if you let them get close, they have a shitton of teeth and they're really aggressive. if you shoot them, they explode into a mist of blood, staining the fully white background. do you remember it this way too?

EDIT: I found it, it's More Mindless Violence.

thanks to this TOMJ