What I can remember is there was some sort of grotesque man killing monster that evolved(mutated) in the toxic sludge of a sawmill pond or the polluted area adjacent to the pond. The mill was closed down because of high levels of (mercury?) something used in the sawmill. It was causing animal mutations and infant mortality. A man was sent to the area to identify the cause of these problems and has to battle an organism bent on his destruction.
I probably read this novel in the late 70's or early 80's.