I'm not sure about the tobacco/possum fat solution, but the type of bird that you saw could have been a golden eagle. I've noticed that sometimes if it's been really rainy, their nest sites can start to decompose, so if you used your night vision goggles to look at it, it might appear like some sort of hideous bird/alien hybrid.
Was the log from a deciduous or evergreen tree?
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"Illuminant light,
illuminate me."