well, to talk to the external mail server you just need the linux box to be routing properly...
squid is for accelerating the surfing and saving bandwidth and that sorta stuff (yes, you can use it to share one ip address but that's not the point)...
if you can't ping the internet from the linux router or the lan then something's wrong... are you sure you have the ip configuration set-up correctly? in other words, can you ping the net from the router when iptables is flushed???
try flushing iptables with something like this:
http://www.linuxguruz.org/iptables/s...h-iptables.txt
can you now ping the net from the router???
okay, you could then try using an iptables script generated here to set-up the router for your network (i've tried it and it works nicely):
http://morizot.net/firewall/gen/
good luck!!!