I think a lot of the answers here are being a bit too literal.
In this scene the boys are caught in a position where they appear to be looking at - or even into - Ross's butt. Ross's embarrassment about the growth and Joey and Chandler's on their position leaves everyone involved unable to explain for a moment.
So, "using humour as a defence mechanism", Chandler cracks (pun most definitely intended!) a joke that this is just a folksy crackpot (and again!) method of divination, much like stirring entrails, reading tea leaves, or using a groundhog to predict the arrival of spring.
The idea that specific entities in the scene must directly map to participants in the groundhog day ceremony is too much of a stretch, and just not necessary for the joke.
That said, I can't help but mischievously speculate that Ross's butt represents the groundhog's burrow, and Chandler is jokingly suggesting that the groundhog has already retreated back inside.