Well, you definitely
can tie it as a smallish palmer, but the main appeal of the Gr. Gnat fished dry as I see it is the suggestive way it dimples the surface when it sits upon it. That is hard to reproduce with a wet fly.
I can think of many
dry patterns with grizzly hackle, but not a single
wet; its niche in wet flies seems to have been taken over by Partridge

The best use for the cape I can think of are wings from small feather tips and streamers from largish fethers.
If someone has a better idea I would be glad to learn