My girl had the same issue.
It went undiagnosed for several years meanwhile she went to see a bunch of "doctors" and "physical therapists" who literally made stuff up on the spot since they weren't smart enough to figure out what the problem is. It got to the point where walking more than 15 min caused pretty bad pain, so I found a doctor from a local professional sports team and we set up an appointment with him. Immediately, boom, he knew what her problem was and gave her the same options you have.
1. Find a doctor from a local professional sports team that hopefully specializes in hip surgery. Most doctors are idiots and have surgery skills on par with Dr. Nick (hello everybody!). Sports team docs are there because they are very good at what they do, they fix million dollar investments and make sure they can get back to performing as soon as possible. You want these people cutting you up. I'd drop the appointment with the surgeon unless he fits the category I've been talking about.
2. Regarding continuing squatting with the injury, that call is really up to you. You should be fully aware that any considerable movement of your femur will further the removal of cartilage. So if you can squat with little pain now, fine, but just know that the more you squat the closer and closer you'll get yourself to the point my girl got, where simply walking around the block will give you pain because as you squat you are removing cartilage that protects from bone on bone contact. But being strong makes recovery from a surgery such as this one quicker.
3. Assuming you find a good doctor you should be totally back to normal aside from some bursitis that flames up time to time (my girl is 9 months out from surgery). She has all her range of motion back. Keep in mind that immediately after surgery you may have to wear a hip brace that limits the hip range of motion to something like 15 degrees which is not much. But you can have fun with the brace and strap a gun to it and tell people you are Robocop.
Good luck!