I haven't heard of it in animals - but have read a lot on fungal infections in lungs - Dad has one from tearing down a 100+ year old barn.
Merck vet manual covers it:
http://www.merckvetmanual.com/mvm/index.jsp?cfile=htm/bc/51118.htm&word=Sporotrichosis
In humans - I read: "Sphagnum moss and other mulches. What sort of thoughts do you conjure up when you hear such words? The outdoors. Fresh air. A beautiful yard. Health. I'd agree with all of the associations, except the latter. The aforementioned plants often harbor the fungus Sporothrix schenckii, which causes the disease sporotrichosis. The fungus enters through tiny nicks or cuts in the skin (usually on the hand), producing a nontender subcutaneous (below the skin) nodule that eventually ulcerates. Other similar nodules appear days or weeks later, developing further up the arm. The incubation period ranges from 1 to 12 weeks, with most cases becoming apparent 3 weeks after exposure. Inhalation of the fungus can cause pneumonia or cavitation (the formation of a cavity) of the lung. Yuck. Sporothrix can also spread through the bloodstream, taking up residence in your bones and joints. Aren't you darn glad there are doctors in this world?
Given the increasing popularity of gardening, the incidence of sporotrichosis is increasing. Fortunately, the disease can be treated. In the early stages, it readily responds to oral potassium iodide, which can cause the worst case of zits you could possibly imagine, and assorted rashes, red eyes, laryngitis, and bronchitis. In short, you'll be great dating material. But, as your mother might rationalize, think of the character you will develop. As is true for most diseases—but especially for this one—the best treatment is obviously prevention. The obvious solution is gloves, or—if you buy into the blatant decadence depicted in the recent Visa commercials in which it is suggested that it is more "rewarding" to pay someone else to do your yard work for you—hire someone to do the dirty work. In the yucky stages (to use precise medical terminology), intravenous amphotericin B may help. When I was in medical school, we called amphotericin B "ampho-terrible," since it was almost as toxic to humans as it was to fungi. Another antifungal drug, itraconazole (Sporanox), shows promise in the treatment of this disease."
http://personal.coslink.net/kpezzi/fhsexcer.htm#Rosebushes.
another site says: "Sporotrichosis is a fungal infection beneath the skin. The agent, Sporothrix (Sporotrichum) schenkii, is a saprophyte (grows in dead or decaying plant or animal matter) and may be present on thorns or in sphagnum
moss. Those at highest risk are farmers and gardeners, horticulturists, florists, nursery workers, and those using sphagnum moss. It has also been reported in miners in South Africa who came in contact with heavily infected timber shorings. The principal route of entry is by contaminated splinters or soil penetrating the skin through cuts and scratches.
Harmful Effects
The fungus causes a series of hard, red, nodular lesions as it spreads up the extremities, following the lymphatic system. The nodules are granulomas that undergo necrosis (tissue death) and become ulcerated. Rarely does this disease become systemic, but when it does it involves muscles, mucous membranes, internal
organs, the skeletal system, and, more rarely, the lungs.
Preventive Measures
Prevention consists of protection of the hands and forearms with long gloves and arm protectors, especially against splinters, thorns, and contaminated soil. This is especially important for people working with sphagnum
moss."