A clump of mushrooms with broadly convex, umbonate caps the widest was about 35mm across. These pale brown caps were "furry", granulose and had deep brown slightly flattened centres.The cap margins were fringed but intact probably because they were still young. The stipe was cream coloured and plain down to a wispy ring, it then became "squamulose" or covered with minute scales all the way to the base. Gills looked a brown colour, forked but they appeared to have a sooty look to them. There were also beads of pale blue liquid droplets on the gills ( pics # 4 &5)
Growing in wood chip mulch and below eucalyptus trees, in a nature reserve http://bie.ala.org.au/species/Lacrymaria...
Thanks to TheMiesMeister for helping with the identification of this Genus. The term lacrymaria refers to the droplets of moisture "lacrima =tear". L. asperospora has been documented in the Dandenong Ranges. I am lucky to have found these mushrooms with the droplets still fresh !! A similar species L.lacrymabunda ( weeping widow) is said to be found in Australia but I am not able to find an adequate reference for this. Also called Psathyrella asperospora