I looked at the rom in a hex editor and didn't see any ascii text referring to Squirrel (or anything else ascii in english). The opening Capcom chime is 7khz 8bit PCM playback (using two DACs for 8bit playback). But the music doesn't use any samples/DDA. So maybe, dunno. The demo appears to be written in assembler with their own routines, so I'd hazard a guess that they wrote the sound engine too (a handful people have written their own sound engines for pce, so it's not unlikely).