This is the Velvet Ant, aka the "Cow Killer Ant." We found a few of these in the field today. Apparently, they like sandy soil. They are a type of wingless wasp. They generally feed off of the larva of ground bees. They have exoskeletons that are so hard they almost cannot be cracked with a display pin.
I am told I would rather be shot with a .22 than be stung by one of these little buggers.
Don Manley, a professor emeritus of entomology at Clemson University who has studied the insects, recalls his run-in with Dasymutilla sp. as the worst sting of his career:
I had heard from others who had been stung by a velvet ant that ‘it hurt so bad for about twenty to thirty minutes that I just wanted to die and get it over with’ … I had worked with [velvet ants] for over twenty years before I was finally stung. I concur with the description. I have not been stung by a velvet ant since — I will not be stung by a velvet ant again.
The good news is that the dogs did not get stung and nether did we. I did get a picture with my iPhone, however!