I am an old school bag collector, and any character I play must have a large soiled bag. Its just a preference to days gone by.
First a couple things about Guano.
1 - He pops in Bats near the pounding stone. Up the path from the stone trap is a bat in an alcove. To the immediate right is a path that leads into a little room with 2 bat spawns. Guano will pop right in this area.
2 - He immediately invis's himself and while the bats will aggro you if your standing around, Guano will NOT.
3 - Guano roams, so if you dont kill him on spawn, he will roam around and unless you track you will not know he is up.
My guide to camping him.
1 - If you have the plat to fund it. Just park yourself and your merc right in middle of bats. If your relatively high enough (I was 60) your merc will just kill them and you ignore them.
2 - Set up an audio trigger with the phrase "Guano Harvester" as he casts invis right upon spawning. Set it very loudly and you will know when he pops. This leaves you to do other things in RL like work or laundry.
3 - When your trigger goes off, RUN ! KILL ! LOOT !...then if bag drops..gate away very happy 8)
In any event. I camped the Guano not knowing if he was still around as it had been a few years since I needed one.
I camped him yesterday and today for a total of about 13 hours. I was beginning to think he had been taken out of game, but he finally popped the first time about 9 hours or so into it.
He gave me his old cloak (the rare drop I was NOT wanting). Sooooo back to a camping for it. About 3 hours later he popped again and dropped my new bag! Happy days.
For those of you wondering why I find his bag so useful its because it holds lots and lots of ORE. It may be small item bag, but ore is tiny/small and fit nicely in it.
That and not many folks running around have old school stuff like the bag. Its a nice link item / conversation piece.

Cloak of Shadows
Large Soiled Bag