Zombie Elvis is a myth featured in the Grand Theft Auto III era games. The easter egg has to do with an article on the Liberty Cock newspaper. The newspaper's headline reads "ZOMBIE ELVIS FOUND!", alongside a picture of Elvis Presley's face. Presley's face is contorted into an almost comical expression; his mouth is open and his eyes appear white, thus making him crudely resemble a zombie. This is an easter egg added in the game by Rockstar to reference the real-life urban legends of Elvis Presley being seen in public during the 1980s, after his death in 1977. They were also reported in the '90s and 2000s, the era that San Andreas and GTA III take place in.
The Liberty Cock newspapers can be seen floating around the streets in Grand Theft Auto III and GTA Vice City, however they were removed from the iOS release of Grand Theft Auto III. The headline "Zombie Elvis Found!" can also be seen on the banner that is pulled by the Dodo airplane in GTA III and GTA Vice City.
Several pedestrians can be found in GTA San Andreas that bear a strong resemblance to Elvis Presley. The pedestrians can be found in Las Venturas around The Strip. However, these peds are just easter eggs, referencing Elvis Presley impersonators. Anything further than that is false.