Squid's Room was a room for IBallisticSquid built in Episode 159.
In Stampy's Lovely World, IBallisticSquid, one of his Minecraft Helpers, started building a little house for himself in Episode 102, because, AmyLee33 and Rosie833 kicked him out of his old room across from Stampy's room. He finished it in Episode 159. Unfortunately, his house was destroyed by the evil Hit the Target and Veeva Dash in Episode 455. His room was beyond repair and was never been rebuilt. The remains were removed, and the entrance was sealed. It was replaced by a birch and spruce path connecting the Hot Air Balloon and the Rocket Ship to the Town.
As you walked into the big massive Dog House where Stampy's dogs are kept, you should have saw a door on to your left. If you walked in it, you would have seen a little blue entrance. As you continue to walk around this room, you would have seen a kitchen that lead to a little balcony/fishing area outside. Then below the kitchen was a Living Room with a flat screen television, bluish couch, and wardrobes. Also, there were 9 item frames of Ink sacs around the little apartment. And finally, you came into a small sized Bedroom with a blue shower Squid claims he actually slept in! And finally, sometimes you should have seen a slippery fellow hanging out there! It was a pretty good establishment for the slippery kind.
In stampy’s newer videos like episode 600. When entering the water room if you look very closely through the glass filled with water in the water room. You are able to see the remains of Squid’s Room through their. The remains are all dark and destroyed as seen in episode 600.