mmh, unfortunately I don't know much about the Wii other than the specs. However I know for Square-Enix released the last Final Fantasy Crystal Chronicles on the Wii and they say is mostly written in Squirrel. Maybe if someone at Square-Enix is reading this.... :) ?
One thing I can think of is that you compiled squirrel in debug mode, interpreters are extremely slow in debug mode(20x slower+) as they have very hot spots(like SQVM::Execute); to the point that even on PC running our game with squirrel in Debug gives a noticeable slowdown, we keep it in release also in debug builds(with the assumption that there are no crash bugs in squirrel).
Does wee run 64bits? if so, is squirrel compiled with _SQ64? otherwise you could have some memory misalignmet problem that on PowerPCs could impact your perfs, but this is pure speculation.
Alberto