So explained his housemate, the infamous "serial pest" Peter Hore, as he mourned the man he called a "spiritual brother" on Thursday.

Mr O'Grady's body was found hog-tied, half-naked and face down in a Wickham cricket oval in Newcastle on Wednesday.

Police have set up a taskforce to investigate his grisly death and the very public dumping of his body.

"My spiritual brother has been murdered by someone and they have made it look like a paedophile revenge murder when he had nothing to do with that kind of stuff," Mr Hore said.

Mr Hore is notorious for interrupting sporting and celebrity events. His long list of stunts include gatecrashing the funerals of former INXS frontman Michael Hutchence and racehorse trainer T.J. Smith. He has also invaded the NSW and South Australian parliaments and once charged towards Sarah Murdoch on stage during a lingerie launch at Brisbane.

Police, who say there is no suggestion Mr Hore had any involvement in the death of his 52-year-old housemate, have not determined a motive for Mr O'Grady's murder.

Officers said the manner in which his body was found did not suggest any links to a gangland killing.

Mr Hore, who said he was now frightened for his own safety, explained that he knew nothing about his mate's death until police made contact with him on Wednesday afternoon.

Mr O'Grady's body was discovered by a woman walking a dog in Thomas Armstrong Oval about 8.20am.

Police searched in and around the park throughout the morning, possibly for a weapon, then moved their attention to the house that Mr O'Grady shared with Mr Hore in Valencia Street.

Mr Hore sought permission from police before returning to the Mayfield address on Thursday afternoon.

He had shared the house with Mr O'Grady for two years, along with a pet menagerie - goldfish, budgies and cats. Lots of cats apparently.

"He was a friend, a brother, who gave me somewhere to live for $180 a week because I am a little bit different," Mr Hore said.

He described Mr O'Grady as a generous and intelligent man, but one who drank a lot, often to excess.

It was "stupid" of Mr O'Grady to tell random people about his inheritance but that was often how he got talking and drinking with people.

"He was that kind of person who would meet everyone and anyone in the street ... He knew a lot of people, but I was his only friend."

Mr Hore said Mr O'Grady had owned a boat and car, which were left parked out the front of the house for two years because he couldn't drive.

The car, a white sedan, was found by police abandoned on Ash Island and is being examined by specialist forensic officers. It is understood the boat has also been recovered by police.

Mr Hore said the last time he saw his mate was on Tuesday morning.

"He walked out with a bottle of beer in his hand saying 'this is breakfast' and I just shook my head.

"We were brothers who lived together and communicated with each other and sometimes drank together ... and suddenly he's gone, but not because he's a nasty person."

Mr O'Grady was a familiar face in Mayfield, according to neighbours who described him as "a lovely guy", with "a heart of gold".

"He was a real character, an unusual sort of man," said one neighbour who spoke to him often.

Another neighbour said he was known as "the cat man" by people living in the street because of his fondness for cats, and the number of cats living at the house.

Mr O'Grady was regularly seen wandering the streets of Mayfield and police were often seen at his house. Mr Hore said his housmate was often brought home by police highly intoxicated by alcohol, but that he never touched any other sort of drugs.

Mr O'Grady was found with bound feet and hands and wearing nothing from the waist down apart from a pair of black socks. A pair of white sport shoes were strewn on the grass nearby.

Mr O'Grady's body was dumped in the middle of the oval, clearly visible to anyone crossing the Maitland Road railway bridge.

Footprints in the dewy grass appear to indicate the man was dumped there on Tuesday night.

A nearby business owner said police told him they were searching for a knife.

Newcastle crime manager Acting Inspector Jeff Little said police are exploring several motives.

"The fact that it is in a location in a public area, in the open, an oval, on that note we are hopeful that someone may have seen something, and with that information we urge you to come forward," he said on Wednesday.

"This particular offence is not a matter of a body that someone has tried to dispose of or hide, it was out in the open and that is quite clear."

He said the strike force would examine all avenues, including organised crime, sexually motivated links and drugs.

They were ruling nothing out.