Is there a device to measure distance to a live wire through bone-like material?
Context

What others have rightly pointed out is that you have many modalities to choose from each with its own strengths and weaknesses. 

If you want to pursue the electro-magnetic modalities, what you are trying to do is certainly possible and practical.

Interferometry ("High" Frequency)

If you can control the wire, EnSite NavX from St. Jude's uses a 20MHz RF signal to do localization by Time of Flight (via interferometry) if I recall correctly.

We use it in our interventional cardiology procedure rooms ("cath labs").



Electrostatics ("Low" Frequency)

I developed a similar approach that works at near-DC (quasi-static).