Mothballs should never be used in that manner. They are a highly toxic substance that is not meant to have exposure to the soil, or to non target organisms. Their only perscribed use is in an enclosed container of some kind, to kill and repell insects.

Moth ball poisoning is a common occurance for young children, pets, birds and other wildlife. Your mothballs could be picked up by a bird, then dropped elsewhere....where they could do great harm.

While I agree with Rhizo, if you find mothballs to be effective then feel free to use them with reasonable precautions.

As mentioned, they should be enclosed in a manner that they do not come in contact with the soil or living creatures.

As long as you do this and the odor is the only thing living things come into contact with you are fine.

However, do consider that the enclosure needs to be waterproof or have some means of reliably containing the water contacting the moth balls in order to be ecologically sound.

Squirrels are a challenging nuisance and I don't fault anyone for the methods they find sucessful in limiting the damage they cause, just be safe, please. Safe for you and yours as well as safe for your neighbors and theirs.

When I planted tulips last year, I put bonemeal in the hole with them (as fertilizer) and sprinkled red pepper flakes over the tops of the bulbs, then some more of same on the soil as I was filling in the hole.
Also I planted both a daffodil (poison to everything) and a tulip in the same hole, next to each other. Daffs bloom in April, & around here, tulips in May, so I got 2 flowers from the same hole at different times, & deterred rodents from the tulips. It worked, this time anyway.

The active ingrediant moth balls have is a class 1 carcinogen and it is a violation of federal law to use them in any manner not specifically listed on the box. Spreading them around you harden is not there and they should not be used in that way.
While I have had squirrels dig up the bulbs, I've not seen them munch on the flowers, but I'd use a hot pepper spray if that is a problem.