I honestly can't tell you what it is, by what you've described it seems he may have been chewing/swallowing something that little feathered tricksters should keep away from!
Nice of him to share with Quicksen, I guess...
Anyway, I don't know of any natural substance budgies regurgitate that sounds like what you said, but I think it would be more likely to be paper towel.
Please keep an eye on him for me and keep us posted!
Nobody wants our favorite dive-bomber to be sick!