I have had a response from the Qld museum and the FungiMap group in Victoria and this is the result. "This is a fungus called Ileodictyon gracile. When it expands out of the 'egg', there is an olive-brown slime on the inside of the arms. The slime carries the spores and it is smelly - a strategy to attract insects which then spread the spores." It just goes to prove that when you think you have seen it all nature is always surprising us!!!