Derek - For Squadron putty thinning and freshening up, I use Testors or Tamiya liquid cement. A tiny amount, (one drop,) on a small metal dental spatula works wonders, place in tube top and stir around until the desired consistency is reached. Too thick still? Add a bit more. If the top layer of filler is crusty, just remove and toss.
I'll give a big shout out for Tamiya filler, much like Squadron in consistency, but much nicer to apply and it has yet to shrink any amount for me. Although, I only use it when any shallow amount of filling was needed, for deeper areas then I use shredded styrene tiny bits dissolved in liquid cement, fill and wait until completely dry, (about two days.)
Patrick