Squidward broke into the Krusty Krab in the middle of the night in attempt to eat another Krabby Patty. Before entering the Krusty Krab, Squidward saw a bucket above the door, which he initially thought was a burglar alarm or simply a bucket of water. When he was about to get inside the Krusty Krab, the bucket fell on the floor and Squidward realized that what was in it was actually gas. Once he said "gas", a robotic arm dropped a match on the gas, causing Squidward to scream in pain, while running all the way into the kitchen, where another bucket of gas fell on him, causing him to scream again. Somehow, Squidward didn't die from the explosions.
When he became overweight after eating multiple Krabby Patties, Squidward's body exploded. As a result, his head was decapitated while his legs were in a bucket. Squidward would have died, because in reality, once a person is beheaded, the head can't be put back onto the body without the person resulting in death. Like the explosion incident, however, Squidward didn't die, and somehow appeared again in the future episodes.