The hairless carcass was discovered in Tenby by dog walker Peter Bailey, who sent photos of the animal to the council.
Bailey told The Sun: "It was a disgusting-looking thing. My first impression was that it had the face of a horse, the claws of a bear and the body of a pig."
He added: "It was obviously decomposing and it had lost most of its hair."
A council spokesman claimed that the bloated body was a Jack Russell terrier, but Bailey believes the metre-long "monster" was too big to be a dog.
Dr Dan Forman, from Swansea University's College of Science, said it was possible the creature was a badger.