Help! What is this...?

[Pete]

Could someone please help identify the object shown at

	http://www.seanet.com/~pmar/P1010452a.JPG

It's an isolated specimen found recently on one of the San Juan Islands
in Washington State (USA). It was on rotting wood at the base of a fir
tree.

The red "balls" are about 1/8-inch in size. The pic shows small pine
needles for comparison.

Can't find it in the fungus books; maybe it's a lichen or something's
eggs?

Thanks for your help?

Pete