Yes, that is supposed to be the severed head of Gorgon. In the Creek mythology, the head ended up to Athena, who attached it to her Aigis, which was usually thought to be either a shield or a armour. It was common in the art throughout the Greek world to depict, among other things, warriors wearing gorgoneion in their shields or in their chests. Also seems to have been rather common symbol among those peoples who came into contact with the Greeks.