You got your if else statement turned around.
You are checking the opposite direction of what you want.
it should look like this instead:
<img src="https://dl.dropboxusercontent.com/u/2560922/mobiledev/forum/enemySquirrel.png" border="0" />
I added the Mirrored not mirrored.. dont know if it comes later in your tutorial <img src="smileys/smiley1.gif" border="0" align="middle" />