Mycoplasma is as bad as it sounds.
Mycoplasma is a bacteria that lives in the lungs of certain animals. Chickens are apparently also big carriers of this bacteria which is why a product called Tylan exists. It's a good idea to keep some Tylan on hand (see "It is a good idea to keep your rat medicine cabinet stocked!") or, better yet, water-soluble doxycycline.
Most rats are carriers of Mycoplasma so it's easiest to assume that your rat has it. In this assumption you can also assume that you should keep your rat-room draft-free, a good temperature (around 70 - 80 degrees Fahrenheit), clean, and dust free. If you keep your rats in aquariums, for example, you would need to clean their habitats more often than you would if you had an open cage for this very reason as the ammonia smell can be stressful on their lungs. This is also why you want to avoid bedding materials such as Pine and Cedar. The harsh smells make it hard for them to breathe and will ultimately stress their immune system which has more important things to do (like fending off the Mycoplasma killer).
Mycopolasma is the main precipitant of scarred lungs, difficulty breathing, never-ending colds, and pneumonia. Obviously the worst is the pneumonia as rats, being as small as they are, can't afford to be weakened by such a harsh lengthy illness. Some rats will survive it however, particularly those who were quite weighty in their prime. I wouldn't take the risk, however, so be good about maintaining their environment, and if you see porphyrin staining around their noses in combination with consistent sneezing, make sure to give them that Tylan or water-soluble doxy right away (just make sure to change the water frequently as both the Tylan and water-soluble doxy will turn into a science project in a matter of 24 hours).
Click Here for more things to consider regarding Myco.
By the way, also read this article by Debbie Ducommun regarding Mycoplasma, things to look for, things it does, and multiple treatment options. This is a really good source of information on this topic. As she mentions, for example, Mycoplasma deteriorates your rat's respiratory system at different levels and timing is everything so don't hesitate to treat him or her for sniffles, sneezes, wheezing, etc. (Tip: To check for wheezing, pick your rat up and hold him to your ear for a few minutes. After he relaxes, you will be able to hear what sounds like the squishing of a wet sponge. This should be a faint noise, however when this gets really bad, it's volume gets correspondingly louder.)
It should also be noted that most head tilts never completely go away, and sometimes won't even show up except as a bulging eyeball and as "head spasms." Mycoplasma will basically eat its way around the insides of your rat though, starting in his upper respiratory tract working its way down and aruond their lungs. Rarely, in severe cases, it will work its way up as well and manifest itself as a smelly infection in his ear and/or nose cavity. If your rat's face smells really bad, this is probably what you're witnessing. The last note about this article is that Mycoplasma is not really a virus nor is it a bacteria as it has no cell wall, thus it can not be effectively treated with penicillins. In fact, penicillins can actually exacerbate the problem.
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Disclaimer: There are many non-sarcastic accounts and tips on the web regarding rat care. This is not
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