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Dancing Grunts are found on the level The Pillar of Autumn, if you manage to sneak in and spot the Grunts undetected. Many players have claimed that Dancing Grunts can be found on other levels, such as The Silent Cartographer.
This trick also works in the PC version on Legendary difficulty. Dancing Grunts can also be found in Halo 2 on the level The Arbiter. The Grunts are found after you get into the Heretic Banshee. Dive straight down to the large columns hanging down and in one of the crannies, there will be Grunts dancing around a skull (the Grunt Birthday Skull). They will ignore you. One explanation that might explain them doing this is that they have nothing better to do with their time.
You are also able to do this in Halo: Reach in New Alexandria, but it does not involve sneaking.