For the Zombie Elvis myth, see GTA Myths Wiki.
"Zombie Elvis Found!" is a headline on a newspaper that is found blowing around on the ground throughout Liberty City and Vice City. The newspaper is named "Liberty Cock". It depicts the headline, along with a black and white photograph of Elvis Presley's face. The headline can also be found on a banner which is attached to the DeadDodo plane, which can be seen flying around Vice City. Also seen on the newspapers, below the headline, are the words "Win Shit", possibly advertising a competition or sweepstakes held by the Liberty Cock. Interestingly, on the VC rendition you can see the Liberty Rock Radio logo on it.
This is an in-game joke towards the hysteria that revolved around the alleged "sightings" of Elvis Presley during the 70's and 80's after his death. The newspaper and banner have no relation to the games' storylines whatsoever. There is no other mention of Elvis sightings in any of the games.