Wow, it turns out that not only the inter-net, but also newspapers can be a source of information about edible parasitic fungi. I found this Reuters article rehashed in the pages of the Fair and Balanced newspaper.

Basically there's this fungus called Cordyceps sinensis. Its spores infect caterpillars of Hepilus fabricius moth. These spores grow inside the caterpillar's body, killing it. Once the dirty deed is done, a mushroom stalk grows out of the caterpillar and releases spores to infect new caterpillars.

Chinese have been using dried and ground up infected caterpillars as an ingredient in medicinal tonics since ancient times. But only when the Chinese track and field team won the World Championship in 1993 and their coach claimed that caterpillar eating was a factor, everybody started paying attention:

"The record Wang is referring to is among the most controversial in athletics history, the 10,000 metres mark of 29min 31.78sec she set in 1993 and her coach Ma Junren claimed was down to a diet of turtle blood and caterpillar fungus. "

I don't know about turtle blood, but I am totally paying a visit to a herbalist on Avenue U for some caterpillar-fungus things. There are some very cool Chinese herbalist shops there with whole walls of medicine drawers like the ones that spider-like boiler man Kamaji had in Spirited Away.