Ugh, that is rough. Finding a whole nest and a dead animal is never a fun surprise, especially in an old house. Older chimneys and flues just seem to have more gaps and crevices that critters can squeeze into before they realize they can't get back out. It is a real pain to deal with, and I kind of feel for the squirrel too, honestly. Getting stuck like that is a terrible way to go. Good on you for catching it before someone tried to light a fire.

ben402 said that Diablo blade explosion would've made me jump a foot, but honestly, I'm more surprised you got 8 months out of a finishing blade on pressure treated lumber. Those 60-tooth blades are made for plywood and trim, not wet, gritty 2x10s. The high tooth count means less gullet space for clearing sawdust, so pitch and grit build up fast and cause heat. I'd grab a 24-tooth Diablo framing blade or a Freud rip blade for PT stuff - fewer teeth, bigger gullets, way less chance of that bang. You're asking a finishing blade to do a rough framing job, and it's going to let you know.