That's probably due to pixelation caused by blowing up the image, which makes me wonder why they didn't have a higher resolution version of the image they could have used. I personally can't think of any digital camera that shoots at that size. It kind of makes me think they've nicked the image off Google.
They probably did and then did a small amount of editing with photoshop or some other editing program. I saved and zoomed in on the picture myself and yes, the blur is caused by pixelation when zooming in. While I was zoomed in I took a gander at the rear legs, tail and paws, all of which I can see are those of a Labrador. I should know, mom has owned one for almost 8 years now, if I can't recognise a Labrador when I see one there must be something wrong with me.
I showed this to a couple of friends who don't venture on faf and both agreed that it is a shopped image. The elongated canine looks like a result of camera blurr from the dog who most likely moved suddenly when the photo was taken. Both animals in the photo have glowing eyes which can be caused by the camera flash, and one friend also pointed out that the alleged "devil monkey" in this photo was attacking the other dog, yet the other dog looks quite happy and contented.
Harley, I am not saying Scruffy did not see some strange creature, I am just saying that photo does not appear to be real imho. Scruffy may have seen a strange creature, or it may have been a trick of the light, who knows?