In this paper we show that there are circumstances in which the damping of gravitational waves (GWs) propagating through a viscous fluid can be highly significant; in particular, this applies to Core Collapse Supernovae (CCSNe). In previous work, we used linearized perturbations on a fixed background within the Bondi-Sachs formalism, to determine the effect of a dust shell on GW propagation. Here, we start with the (previously found) velocity field of the matter, and use it to determine the shear tensor of the fluid flow. Then, for a viscous fluid, the energy dissipated is calculated, leading to an equation for GW damping. It is found that the damping effect agrees with previous results when the wavlength λ is much smaller than the radius r i of the matter shell; but if λ r i , then the damping effect is greatly increased.Next, the paper discusses an astrophysical application, CCSNe. There are several different physical processes that generate GWs, and many models have been presented in the literature. The damping effect thus needs to be evaluated with each of the parameters λ, r i and the coefficient of shear viscosity η, having a range of values. It is found that in most cases there will be significant damping, and in some cases that it is almost complete.