Looks exactly like a yellow jacket nest. Yes, the cells are very small...and the larvae are very small, too.

Skunks are just one of the animals that commonly dig up these nests. Yes, they get stung plenty, but they don't care. ;-)

Thanks rhizo. I'm amazed I never got stung mowing over this all summer. I would gladly invite more skunks into my yard if they'd dig up the yellow jacket nests for me. Hard to believe the skunks don't mind getting stung.