Ferns, Mushrooms, Fungi and Mosses: Fungus?, 1 by RUK

RUK wrote:
I was wondering if I should post this in plant identification, but I think this forum might be more appropriate.

I am growing a small Orchid ( Platystele stenostachya) on a branch, and the log has some interesting protuberances on it. I was intrigued by it when I bought the plant in April from Andy's Orchid in Ca. Originally I thought it was perhaps a Lichen, but so far have not not been able to match it up. Now yesterday I sliced one and took a closer look. The slices smell very mushroomy. Any ideas? Is this a Fungus of sorts?

Here are some pics -