I've killed 37 squirrels so far with an airgun. 15 with my Prod - my first PCP. 2 with my 25 caliber Avenger. 18 with my 25 caliber P35. And 2 with my 177 caliber P35. One of the 177s was a body shot but my dog was out and grabbed the squirrel as soon as it got to the ground. It was making noise so it had not died until she got done shaking it. I plan to kill more with the 177 before deciding if I like the results on body shots but the one head shot was DRT.
Of the 15 I killed with the Prod I recovered 12. Two were body shots with the as-received tune that ran into a neighbors yard. I might not have hit them as well as I thought. But when I turned the power up to 17-18 fpe, I had none run off and the only one I lost rolled into a rotted out area of a tree and I could not reach it. I have killed squirrels with Crosman domed and hollow point but my Prod shoots a little better with H&N FTTs copper plated so that is what I normally use. I tested penetration on a dead squirrel both at the original power and with the power increased. At the original power, only the heaviest pellets would go through and it isn't very accurate with them. With the re-tune, most shots go through. 7 of the 15 where body shots so 5 squirrels were recovered with them (the one that went into the tree was an obvious brain shot - flipped and flopped). They did not run far if they ran at all. Crosman hollow points do not expand at all at Prod velocity. My gun shoots them just as well as the domed so I used them when I could not find domed or H&N FTTs (must be copper plated for my gun, plain ones shoot worse than Crosmans).
I recovered all 20 shot with a 25 caliber. The only two that ran were hit in the center of the chest with the P35. It shoots H&N FTTs at about 875 fps. I found the pellets under the hide behind a rear leg. The furthest they ran was about 15 feet. There were 10 body shots of the 20 dead squirrels. The only other shot that did not exit was a double shoulder shot with the P35. The Avenger shoots FX 25.4s at about 930 fps. I think it is a bit much for the backyard and I like the P35s more so I use them a lot more.
I am completely confident in taking body shots with either of my 25s on squirrels. I plan to avoid center of chest hits, however, since they seem to kill slower. But shoulder shots have been DRT consistently. The H&N FTTs my P35 like is about as light as you can get in a 25 caliber lead pellet at 20 grains and it kills well. I am not a fan of expanding pellets and I don't think there is a "energy dump" from a pellet gun. I think we just make holes. The holes need to be deep enough to hit vitals, even if we hit the shoulder bones and wider holes let blood flow out more quickly. If you have a really high powered PCP for the caliber and have more than enough penetration, an expanding pellet may reduce the velocity at the exit and make a wider hole. But I am sure I don't need wider than 25 caliber holes to get quick clean kills. I think exit wounds may be significant in how long the animal tries to flee.
I don't have enough experience with my 177 to have a firm opinion but I think a 22 airgun with about 15 fpe at impact is also reliable for well placed body shots. My Prod came tuned such that it's maximum power at about 2500 psi was only about 14 at the muzzle. That worked great for brain shots but I was not satisfied on body shots. I have a P35 in 22 now and also hope to gather some data with it this hunting season. The squirrels have been hiding from me so far. My P35-22 likes H&N Baracuda Match and shoots them at about 835 fps. Heavier pellet than my P35-25. I'm sure it will be plenty but I am interested in seeing how they react to body shots.