Can't Decide!

This little mushroom is giving me quite a hard time to try to get it's name.
Every time I search using the reseverse image, it always give me a suggestion of a small insects.

It is either a bug, a small caterpillar but the fact is that this is a small mushroom living in a dead branch. I suspect it is because the branch is dry, thus making the mushroom look like that, or maybe it is really because of the type of the mushroom itself which give it that look.

The hair on its body certainly resemble the hair on a small caterpillar. Or maybe it can't decide to be a caterpillar or just be a mushroom. : )