I entered a large area full of lava after ringing the second bell. Then this fleshy popcorn shaped thing appeared on my head. How do I get it off? Will it have any ill effects?

Did you enter the Chaos Witch Covenent and break it by killing those dudes with worms on your back, cause that's what happens, I also think they take a percent of the souls you earn too every time you kill an enemy

Are you in the witch's covenant? It's a side effect. Oh and congrats, you just lost your egg virginity! There's an npc that will remove it for you.

Which NPC would that be? :D

I think it will take souls from you and grow until it evolves into a worm, then it will start helping you in battle but will also make you more vulnerable to fire attacks.

You can also use egg vermige item which you can obtain by killing the snake-like things on trees in the Darkroot Garden.

@simpliztik: Dude there is some epic planking on your avatar.

It's an egg that will eventually transform into a larva thingy.  This will make you more vulnerable to fire damage and, when fully developed, will replace your kick animation with one wherein the larva pops out of your head-egg and hits your enemy.  You should probably find an egg vermifuge in order to remove it, as it will continue to steal a portion of your souls as it grows.
 
There are these two-headed lizard enemies that hide in certain trees in the Darkroot Garden area and they sometimes drop egg vermifuge.

Yeah, I had that happen to me when I ventured into Demon Ruins and one of those larvae things latched onto me.

You don't even need to be in the covenant.  Simply killing egg burdens and getting hit by the larva that pops out has a chance to infect you.  So until you get it treated, I hope you enjoy getting only 50% souls off kills, boss kills included. 

Looks like a monkey to me. Also, you're SpongeBob.

Best way to avoid this is to just ignore those guys with the eggs on their backs. Most don't attack you and the ones that do can be very easily avoided.

Oh snap you've done fucked up. Good thing I didn't even think of joining that Covenant.

@biospank: Pretty sure it can only happen through the covenant if you do something to break it.

@biospank: Oh ,I bet it is, but I don't know man...those guys just rub me the wrong way. Also I don't like the thought of having a fucking worm living in my head. All the pyromancy I need is Fireball, I love the one hand throwing animation.