A couple of days ago one of the local squirrels made its usual raid on the bird seed feeders:
As I watched I noticed it had several large patches of fur loss:
A search of the internet resulted in finding several possible reasons for this to happen:
1) Result of a fight
2) Mange which can be caused by squirrel mange mites
3) dermatophytoses - a variety of fungal infection. The fur isn't lost but breaks off as it brushes against things.
There are other causes but I think in those cases the squirrel would likely be nearly or completely bald. The above mentioned causes tend to be temporary and the probability is that the fur will grow back in time.