I have upgraded my squid from 2.5 STABLE13 to 2.6 STABLE18. Transparent proxy is setup differently in this version. You need this directives in squid.conf (usually in /etc or /usr/local/etc or /usr/local/squid/etc, check with your distro).
acl our_networks src 192.168.2.0/24 127.0.0.1References:
http_access allow our_networks
http_port 192.168.2.1:3128 transparent
always_direct allow all
where 192.168.2.1 is your proxy server IP address.
If you have flushed your iptables, create new rule:
iptables -t nat -A PREROUTING -i eth0 -p tcp –dport 80 -j REDIRECT –to-port 3128
where 3128 is the port where squid is running.