The Cedar is not diseased, I have actually watched the rodents do this damage. Gnaw off a branch, start moving towards the nest, drop the branch. Repeat. Just with the snow, I did not realize how much the suckers dropped.
So far the only "good" solution would be to get rid of the bird feeders. I do not wish to kill them, maybe just force them to live elsewhere. Is there anything else I can do to discourage them?
I have a small-scale version of your problem with a sweet gum. I used to shoot them, but then a pair of red-shouldered hawks moved in across the street. Over three years they fledged 7 young, and they exterminated most of the squirrels and chipmunks. They are just now coming back after the departure of the hawks. We don't have trouble with ash trees - they are almost all gone, and the city has several crews working full-time to remove what's left.
Are there other trees suitable for squirrels besides the ash? Are you treating it? If both answers are no, then get rid of the ash.