So you think this is a victim of fungal infection?

The only caterpillar-attacking fungi I'm aware of cause their victims to shrivel up rather than to bloat like this. It reminds me of a victim of an Aleiodes mummy wasp, but there is not one that is known to attack this particular species. I might guess A. cameronii, since that species is something of a generalist with recorded hosts including one unidentified notodontid (see Shaw 2006, reference on the Aleiodes guide page). It would be interesting to see a close-up of the white area under the caterpillar and try to determine whether that looks like silk (spun by wasp larvae) or fungal mycelium. I've never seen an Aleiodes-killed mummy with silk under it, though, come to think of it. I guess it could be a variation on this:

?
Short answer is, I dunno! But it's an interesting puzzle.

I've added 2 larger photos that show the white area better. I almost looks like a ball of white fuzz covered by a thin layer of the caterpillars skin.

Weird. My gut feeling is that it's a cocoon mass of some kind of braconid, but it doesn't look quite like anything I've ever seen or heard of. I'll try to get some expert opinions... stay tuned...

Here is the response I got from Scott Shaw, a braconid specialist who wrote the Aleiodes reference I cited above:

"This caterpillar has been parasitized by a campolegine ichneumonid (Ichneumonidae: Campopleginae). Most likely it is supported by one elongate-oval silk cocoon. David Wahl at AEI in Gainesville Florida is an expert on these, maybe you can get his opinion on the genus and species."

I should have thought of this, since braconids typically leave much more of the caterpillar intact, while campoplegine ichneumonids tend to leave little more than the skin and head capsule. Part of why that didn't occur to me is that I didn't see your size estimate, and was picturing this being a full-sized caterpillar. Anyway, here's David Wahl's response:

"Yes, it is most likely a campoplegine, but what it might be is another question: there are several candidate genera but going from just a picture isn't a good move."

for all the information. I wish I had saved this specimen to see what emerged. At the time of the photograph, I incorrectly assumed this was a typical Unicorn Caterpillar Moth pupa as I had never seen one before.