four lean hounds crouched low and smiling the sheer peaks ran before.
We're not just in the mountains. In fact, they're "sheer peaks." Things are getting pretty serious. We can tell because the terrain is getting tougher and tougher. The first time we met the hounds, they were chasing deer. Then they were running in meadows. But now they're chugging up mountains, which, we're guessing, is no walk in the park. (Okay, we'll stop there.)
Funnily enough, the only things that haven't changed at all in this poem are the hounds. They're still "crouched low and smiling," just like they were at the very beginning.
If you think it's weird that the hounds stay exactly the same, well, you're in good company. We don't know quite what to make of it, other than to point out that they seem to be sidekicks to the real action of the poem. If this were a sitcom, they'd be the next-door neighbor who always pops in saying the exact same thing—every time. In other words, they're almost part of the setting, something that signals that a hunt is underway but doesn't advance the action at all.