What did you do exactly? Did you just installed Java 7 and switched java_home?
I also had to modify the file
/Applications/SQuirreLSQL.app/Contents/MacOS/squirrel-sql.sh to point to the Java 7 binary. It seems that during installation, Squirrel determines your java binary at the time and hardcodes it in the sh.
From: Daniel Teixeira <email@example.com>
To: Roberto Cortez <firstname.lastname@example.org>
Cc: "email@example.com" <firstname.lastname@example.org>
Sent: Thursday, July 11, 2013 11:42 AM
Subject: Re: [Squirrel-sql-users] sql editor blinks
I have tried with Java 7 as you suggested, but it keeps blinking ... :/
I have SquirreLSQL version 3.5.0 and the java version:
java version "1.7.0_25"
Java(TM) SE Runtime Environment (build 1.7.0_25-b15)
Java HotSpot(TM) 64-Bit Server VM (build 23.25-b01, mixed mode)
It would be really great if the squirrel team could find a solution to this!