Paleontologists have finally identified two kinds of mysterious fossils misidentified for a century — and traced them both to some phallus-shaped worms that lived 505 million years ago and built themselves some very elaborate homes.

Key to solving the mystery was an extraordinary new fossil bed discovered just four years ago and insights gained by the scientists through dissecting the rotting carcasses of some modern worms.

In 1911, American paleontologist Charles Walcott collected a fossil of a strange worm called Oesia disjuncta at the Burgess Shale of B.C.'s Yoho National Park, a now world-famous fossil bed that Walcott had discovered two years earlier.

Margaretia dorus is the name given to a fossil that was originally believed to be a strange kind of tubular algae. The fibrous tubes with lots of pores turn out to be the homes built by Oesia. (Jean-Bernard Caron)

Another unusual find at the Burgess Shale was Margaretia dorus, which paleontologists proposed in 1933 was an extinct, tubular algae.

Researchers have now concluded that Oesia is a relative of penis-shaped marine animals that still exist today, called acorn worms, and Margaretia was a tubular home that it built for itself, they report in the journal BMC Biology this week.

Acorn worms aren't related to earthworms or parasitic worms such as roundworms. Instead, they belong to a group of animals called hemichordates that are more closely related to sea urchins and starfish; and to chordates, the group of animals that includes humans and many other animals with a backbone.

Modern acorn worms don't build and live in tubes. Instead, they bury themselves in the mud of seashores around the world.

But several years ago, Jean-Bernard Caron, a paleontologist at the Royal Ontario Museum in Toronto, and some colleagues identified a Burgess Shale fossil that appeared to be a tube-dwelling acorn worm, named Spartobranchus tenuis.

Karma Nanglu, lead author of the new paper, said previous decades saw a lot of debate about what kind of animal Oesia was, but researchers didn't have much to go on other than fragments of poorly preserved specimens.

"Oesia is an extremely rare animal at the original location where it was discovered," said Nanglu, a PhD student working with Prof. Jean-Bernard Caron at the University of Toronto.

University of Toronto PhD student Karma Nanglu was part of an expedition that collected fossils at Marble Canyon in 2014. The new fossil site was discovered in 2012. (Joe Moysiuk)

Then in 2012, an extraordinary new fossil site dating back to the same time as the Burgess Shale was discovered at Marble Canyon in Kootenay National Park.

In 2014, Caron led a team that included Nanglu on a 1½-month expedition to Marble Canyon to collect fossils.

Over dinner one night, they discussed the possibility that Oesia might be a tube-dwelling worm and that Margaretia might be its tube, Nanglu recalled.

After getting up the next morning, he said, "that day we found five of the best specimens showing the worm inside the tube."

From rare to abundant

While it was rare at the original Burgess Shale site, Oesia is one of the top five most abundant species at Marble Canyon, Nanglu estimates.

An illustration shows Oesia inside its tube. Oesia is a relative of penis-shaped marine animals that still exist today, called acorn worms, and Margaretia was a tubular home that it built for itself, researchers have concluded. (Marianne Collins)

When the researchers looked back at some of the older Burgess Shale fossils, they realized that some of those showed Oesia inside Margaretia as well. The problem, Nanglu said, was that if the tube decayed enough to show the worm inside, then the worm tended to be decayed as well.

Expert in worm decay

Fortunately, Nanglu was a bit of an expert in acorn worm decay. As a followup to the earlier work on Spartobranchus, he had been tasked with describing how acorn worms looked as they decay so that could be compared to some of the fossils.

In order to do that, he put a bunch of dead acorn worms in a jar, and dissected them at regular intervals as they rotted.

"When you open it up, it does smell gross," he recalled. "But by the end of the summer, I didn't even notice."

What he learned from the project helped him identify more poorly preserved specimens of Oesia.

The specimens from Marble Canyon were in much better shape, showing the worm's anatomy in detail. Their findings confirm that Oesia is an acorn worm and also related to modern, tube dwelling, filter-feeding organisms called pterobranchs that live in colonies and look nothing like acorn worms.

This fossil shows Oesia inside of its tube. A thin layer of rock has been broken off the centre margin of the tube, revealing the worm inside. The right image is a closeup of the framed section on the left. (Jean-Bernard Caron)

Like other acorn worms, Oesia had rib-like gill bars for filter feeding and respiration — but it had a lot more, extending over 4/5ths of its body length, compared to less than a 10th of the body length of Spartobranchus.

It was also much larger overall, growing up to 12 centimetres long and building spacious tubes, some with branches, up to 50 centimetres long and twice the width of the worm itself, that would have looked "almost like trees poking out of the sediment," Nanglu suggests.

Like pterobranchs, Oesia had an appendage on one end for attaching it to surfaces. But unlike the colonial pterobranchs, each Oesia appears to have lived alone in its tube.

Oesia's anatomy, along with the pores in its tubes, suggest it was a filter feeder — much more so than modern acorn worms, which sometimes do that but may also eat mud like earthworms.

The study, which also involved researchers at the University of Cambridge and the University of Montreal, was funded by National Geographic, the University of Toronto and the Natural Sciences and Engineering Research Council.