To me it wasn't, it just looks like a dinosaur, but it really depends on what you think is scary and what is not.
No, it looked more like this angry lizard with a green mustache.
Nessie is a nickname for the Loch Ness Monster. =D
The prize for spotting Nessie during the Cryptids Island preview (beginning December 2, 2010) was a Nessie Hat. (see related link)
The prize for spotting Nessie during the Cryptids Island preview (beginning December 2, 2010) was a Nessie Hat.
The prize for seeing Nessie on the Cryptids Island Preview was a Nessie hat.
take a picture
You look through the viewfinder at lochness.
During the special preview of Cryptids Island (beginning December 2, 2010), anyone who spotted Nessie got a special Nessie hat. However, you could not always see Nessie, and when you did she was a distant shape on the loch. (see related link)
Not really
Dive to the bottom and then go left.
The viewfinder game was part of the demo of Cryptids island and had almost nothing to do with the quest. It was possible to see a hazy outline of Nessie after you saw the dog barking. If you did, you received a Nessie costume prize.
Yes, you can find proof of The Jersey Devil, Bigfoot, Nessie, and the Chupacabra. (see related question)
The prize for spotting Nessie during the Cryptids Island preview (beginning December 2, 2010) was a Nessie Hat or other various costume prizes, from the Nessie follower to the Bigfoot costume hat. (Nothing but "virtual" prizes for your avatar.) (see related link)