This is a small skipper butterfly larva on a willow tree, a tree species closely associated with dreamy duskywings. Here you can see the top leaf is raised up. This forms part of the skipper's shelter. When I first found this, the top leaf was down, enclosing the caterpillar. I only noticed it because the caterpillar stuck its head out!

To see the skipper butterfly it becomes: http://www.pbase.com/laroseforest/image/105962398