LOL LOL I'm sorry, but this made me laugh out loud at my desk. Primarily because I know exactly what you are talking about, and the description is just way too funny (accurate though).

I think offering them a Kleenex wouldn't be offensive, so please don't feel bad. Going to a manager is a good idea too. Seriously, if it's that bad, someone really should say something to them. Honestly, they are probably pretty clueless about how rude and gross it is.

There is some employee here in my company that hacks up a lung at least once a day. My cube isn't far from the restrooms, so I can hear it loud and clear. At least he's courteous enough to the people around him to go to the bathroom to do it, but still...it's SO gross!