Fungus (Lycogala epidendrum)
Lycolgala epidendrum is a somwhat bizzare looking thing. It is described in my book as "a mass of naked protoplams, usually on dead wood, maturing to a light grey-brown, breaking open to expose minute dry fruit bodies enclosing powdery spores." I really don't think I can add anything more to that other than to say it looks quite painful!
Is it edible? Well, would you fancy it if it was?
Find out more about Lycogala epidendrum in Dorset here: http://www.natureofdorset.co.uk/species_panel/Fungus%20%5BL%20epidendrum%5D?vdt=species_master%7Cpage_1