I had found the Lactarius indigo which literally means ‘Milky Blue’. In fact, one of its common names is Indigo Milk Mushroom . It is known as the “milk mushroom” because of its production of a blue latex like liquid when it is cut or harshly bruised. ( source )
The Lactarius indigo isn’t a common mushroom- but it is widespread- it can be found throughout the eastern half of North America growing beneath various oak tree species. The Lactarius indigo that is pictured here is of the one that I found growing in the moss beneath a Post Oak tree on July 30, 2009.
Lactarius indigo mushrooms are edible which makes for a fascinating topic- there are very few naturally occurring blue food products! This mushroom will definitely brighten up a meal. So, how do you cook them? One mushroom expert reported that they are quite good sauteed with butter. Another commented that they are “edible and delicious. One of my favorite edibles.” ( source ) But, as with any mushroom species- be very careful with the identification- as in- be absolutely certain of its identification and edibility.