The edges on the mushroom are pale and uneven looking, which is a sign of chemical warfare.
Yes, you can just take a hammer to a piece of base rock to make some rubble for frags. Most reefers really prefer frags on pieces of rubble, as they're much easier to move and easier to incorporate in the aquascape. Check out the Coral Propagation forum on RC for lots of other DIY ideas for frag mounting stuff.