Congratulations to Glevum. Good Job!
The item is the igniter from a U.S. 2.75 inch Hydra Rocket flare. When the rocket is fired, the inertia fuze in the base initiates a delay, long enough for the rocket to get 3000 away. The flare then separates, leaving about 8 inches on the motor. The parachute is deployed, which pulls on a lanyard cable that extends through a conduit through the illuminant all the way to the igniter on the nose of the flare. The cable pulls the little aluminum flapper, pulling the firing pin, which fires a primer into the boron pellets. The boron pellets burn, starting the fire starting composition on the flare, and blowing the igniter assembly free from the flare. You can see the roll pins that normally stake it in the end of the flare, and the O-ring seal that keeps water out of the flare. I'm not sure if they work any better now, but they used to have a very high dud rate (30 years ago), because the lanyard would bind where it passes through the illuminant, and would fail to fire the igniter, so the battlefield would be littered with unburned flares attached to their parachutes.