Some extra tips
1- Make sure your possession skill is fully ungraded, you will need 13 runes to do this
2 - Make sure the guard is in the area with the pond before you start, if other guards near him notice dead bodies he might run off to inspect them but he will go back down if you wait.
3 - Don't go down the stairs into the basement area before possessing the dog, if you do all the rats will run away and there will be no rats for you to possess.
4 - Save the game before opening the door to the hound, the hound moves further away from the door if you open it. Saving means you can keep trying if you don't get it the first time.