Folks are going to come on with some better experience than me...but it's getting late ...so...

I've dyed animal fur very nicely with Kool-Aid...haven't done squirrel tails but don't see why Lemonade Kool-aid wouldn't do just fine...[just read the ingredients of the Kool-aids and go with the yellows]

There is a lot of info on this BB for using Kool-aid.