There isn't enough detail provided if this is a specific instance, but some degree of demonstrable probable cause would have to be met before such a search can take place. Also, if the public bus is, in fact, crossing the border, they can search anything and everything they want, including body cavities if they so choose. The limitations of their abilities to search otherwise only apply inside the United States.
No. There was a Supreme Court case on this exact issue in the year 2000. That ruling has not been overruled by the Patriot Act. The border patrol (or any other official agency) cannot squeeze your suitcase in this way unless they already have some reason to believe that there is something illegal in that suitcase. If they have a good reason to squeeze and they feel something, they can search. But they can't just squeeze random suitcases in the baggage area of a bus or anything like that, just looking for ones with something suspicious inside.
The case is Bond v. United States. You can find it here.
Yes. Since the Patriot Act was passed, transportation officials are becoming more and more security conscious. They are on the lookout for anything suspicious, including unattended or oddly shaped luggage, people that seem to be acting strangely or any other unusual behavior. Nonetheless, there are still more passengers than they can ever possibly check. The odds are against them finding you at all. Not an encouraging thought, I know!