Chill out, relax. It's a salamander found in the Amazon River. It's called a "Blind Snake." Though this phallus shaped amphibian is ridiculous looking, it breathes through it's porous skin. Pretty cool if you ask me.
Biologist Julian Tapan identified it as Atretochoana eiselti. It was discovered when workers were draining a portion of the Madeira River -- a major tributary of the Amazon -- for a controversial hydroelectric project. In fact, six were found. Many news sources have reported this as a new discovery, but it was actually first found and described in 1968.
Watch this video describing what some are calling the "penis snake":