The LA Times put it best:
Biologists studying a drained river in Brazil have discovered a new species of amphibian that looks disconcertingly like a male organ.
Atretochoana eiselti is a caecilian. That's the family of amphibians that's jealous that frogs and salamanders get all the attention. The Times article concludes:
Tupan said the team believes the creature breathes through its skin and probably feeds on small fish and worms. They know nothing about its sex life.