I'm not crazy, and it turns out Gerbil-Leeches
(see previous post) have a real identity...
Puss Caterpillar
SIZE: 3/4 to 1-1/4 inches (33mm)
COLOR: Tan to brown
DESCRIPTION: The Puss Caterpillar is completely covered with long, silken, brownish hairs. Hidden among the hairs are short, poisonous spines.
HABITAT: Often found on hackberry, elm, plum, sycamore, oak, rose, and wild cherry.
TYPE OF DAMAGE: The poisonous hairs or spins are hollow and connected to underlying poison glands. Contact with them causes a burning sensation and inflammation that can be as painful as a bee sting. The irritation can last for a day or two and may be accompanied by nausea during the first few hours. Usually the site of contact reddens and swells much like a bee sting.
CONTROL: A person "stung" by a poisonous caterpillar should immediately wash the affected area to remove any insect hairs and poison that remain. An ice pack will help reduce swelling, and creams and lotions containing steroids will lessen the discomfort and promote healing. Persons known to be sensitive to insect stings should consult a physician. Stinging caterpillars rarely occur in sufficient numbers to be considered plant pests, but people who work with ornamental plants should learn to recognize them and avoid touching them.
INTERESTING FACTS: The plump caterpillar can retract its head so far into its body that it seems to disappear. When disturbed, the caterpillar extends whiplike filaments from each of the two fleshy hornlike projections at the tip of the abdomen and waves these filaments.