Answer: If it disappeared when you touched it, I'll bet it is a fungi of some sort. There are many, many types and I suspect that it is living off of some buried wood of some sort - either old tree roots or rotting lumber. To keep the fungi from growing, you'll need to dig up the buried treasure. Otherwise, just expect these things to appear on occasion. They shouldn't be attractive to your dogs so I don't think there's any danger in having them in your yard.
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