The Dream: S tells the story of a lizard-like creature she tried to kill. Its intestines (guts) came out, but it didn't die. Now she is faced with having to care for the creature for the rest of its--or her-- life, and this care giving will be intense, involving unpleasant chores such as changing diapers. Her only other option is to do a mercy killing. I am aghast at the poor miserable beast and its condition, and think that I would kill it to get its suffering over with and also to put an end to the awful situation.
Interpretation: In waking life S is hypersensitive and seems to have difficulty negotiating the hard, cruel world. Although I don't know her well, she appears to be someone who has been badly hurt. The lizard stands for both the S part of myself, and for what I anticipate will happen if I spill my guts (show my vulnerability). As the dream ego I display my own intolerance to allowing myself to do it: I find the creature disgusting. There's an interesting play on words here that hints at another aspect of the problem. The poor creature is gutless (cowardly) and needs its diapers changed. This primitive (lizard) part of me goes way back, and the dream is telling me to get a backbone.