The way I read it in the rules, you are to put it on top of the other markers. I feel that it works better anyways. I pondered putting it at the bottom and it became too fiddly with the markers falling over when trying to pick up and place. Thematically, that gnome still has his heart pounding and is ready for atleast one more minute of fun! I found a few times that it was a good place to "stop" see what damage has been caused before doing my next turn, which was basically still... my turn! This helped in determining where I should move my gnome next.
My 2cents.
rob