Metal nail reaction in wall filler
It is such a beautiful picture, perhaps good for a chemistry book cover. It is a similar phenomenon as what happens in a so-called chemical garden. Water seems to be creeping up to the nail head, and helping in oxidation of iron salts to insoluble hydroxides. Finally the gelatinous membranes act like semi-permeable membranc in the osmosis like experiment. 

The figure shows several salt crystals soaked in a slightly alkaline medium.

Ref: From Chemical Gardens to Chemobrionics,Chemical Reviews, 2015, 115(16)
DOI: 10.1021/acs.chemrev.5b00014