A marimo moss ball is actually a type of algae that is formed in rivers as it travels downstream and collects more algae. The round shape is from it rolling along. Wiki page: http://en.wikipedia.org/wiki/Marimo
If you're squeezing, it's probably the light that's the issue. Just make sure you turn it over every once in a while. I don't know how often you do water changes, but it might be easy to remember to just flip it about 160 degrees after every change. Not full 180, because then you're continuously only getting two sides in the sun, but just a bit shy of a full flip every time.