So this gelatinous, orange tentacled ball of goo turns out to be something called Cedar Apple Rust. It is caused by a plant pathogen known as Gymnosporangium juniperi-verginianae. This fungus occurs in any location where apples, crabapples and the Eastern red cedar coexist. It has a very interesting lifecycle, in which the disease starts on the cedar tree, spreads through spores to apple trees, and then the spores from the infected apple tree continue on to infect more cedar trees.
Here's a diagram form Wikipedia:
Here are some of the photos I took of this alien looking plant fungus. You can click on each photo for a bigger and better view!
There are a lot of websites out there with awesome information about this intruiging pathogen. Here are a few that I found:
Cornell University: http://www.nysipm.cornell.edu/factsheets/treefruit/diseases/car/car.asp
ON Ministry of Agriculture, Food & Rural Affairs: http://www.omafra.gov.on.ca/english/crops/facts/cedarap.htm#cedar
The Gardening Life Blog: http://shirley-agardenerslife.blogspot.ca/2012/05/cedar-apple-rust.html