In chapter nine of Gardner's Grendel, irony is present in the interactions between Grendel and the priests:
"Great spirit," the chief of the priests wails, "ghostly Destroyer, defend the people of Scyld and kill their enemy, the terrible world-rim-walker [Grendel]!"
The priest prays for Grendel's destruction while Grendel listens and waits for someone to come kill him, which is ironic. But the irony increases when Grendel poses as the Destroyer himself.
At midnight, with Grendel sitting in the ring of the gods, Ork comes and asks who is there. Grendel replies:
"It is I," I say. "The Destroyer."
Grendel, the nihilist and atheist, poses as the god the priests pray to for Grendel's destruction. That is ironic.
The irony is heightened still further when Ork sees his visitation or vision as confirmation that he is correct in his theories and beliefs. Grendel, the being who detests the pattern-making of humans, laughingly contributes to the confirmation of the patterns envisioned by Ork.
Chapter 9 of John Gardner's Grendel includes an instance of dramatic irony.
Dramatic irony occurs when the audience knows something that the character does not. When it is done well, dramatic irony creates a deeper level of suspense and expectation for the reader, because the audience is getting a glimpse into the mind and psyche of the character. Instead of just wondering what will happen next in the plot, we wonder how the character will react to what happens. This makes the reader care about and identify with the character on deeper level.
Early in the chapter, Grendel the narrator says:
Something is coming, strange as spring.
I am afraid.
Standing on an open hill, I imagine muffled footsteps overhead.
So how is this dramatic irony? It depends on the reader. We can assume that most people who are reading Grendel have also read Beowulf. In Beowulf, the hero kills the monster Grendel. So we know that this is what is in store for the first-person narrator in Grendel. Grendel, of course, does not know this. In this scene, he begins to get an inkling that he is in some kind of danger, but he doesn't understand it. The reader, however, does.