Is it because the next is made up of Stegosauruses?

I was just going to post that... :)

It's a stegosaurus nest so you could use it for stegosaurs or velociraptor.

The grey squirrel doesn't drop either of those, it drops only diplodocus eggs, which you would have needed a diplodocus nest for.

Hi Mardie, it is.  The grey squirrels drop diplodocus eggs.

Okay now I understand.  Thank you everyone!

Puzzled here - I thought that the creature you had to spot to get eggs for any kind of dinosaur changed every week and was personal to each player. Why wouldn't  Grey Squirrels drop Stegosaurus eggs?

Because they aren't part of the set of wildlife which you can be asked for for a stegosaurus egg; they are part of the set which you could be asked for for diplodocus.

They do change every week, and not all players will be asked for the same thing at the same time.  But each dinosaur has its own set of wildlife that it can ask for.  So for a diplodocus you could be asked for gecko, water dragon, field mouse, mallard, grey squirrel, or racoon and no other wildlife.  For a stegosaurus you could be asked for brown bunny, coyote, donkey, girafe, skunk, kangaroo, rainbow dragon, fox, hare or camel.