We know squirrels hibernate, and they dig in the dirt to hide their nuts... So... The Hibernating Squirrel is when you are doing a chick doggy style in the ass(Digging in the Dirt) and you tuck your balls inside her vagina (Hide your nuts)
"yo dude did you bang that broadlast night?"
"Yeah man, I gave her the ol' Hibernating Squirrel!"