Heather, that doesn't sound like any kind of media I at least have ever run across. Actually, it sounds more like some kind of egg case; that "bark powder" inside might be insect eggs.

Not sure, so don't freak, but: you should probably run some insecticide through the media and repot as soon as possible.

(And, even if it does turn out to be some kind of newfangled osmocote or something, no harm would be done...)