==Update==
Note, this is no longer an issue. I uninstalled 2.5 and installed the latest 3.0 stable. Works like a charm. I think there was a bug or something in 2.5. It only took me 20 minutes or so to setup 3.0. Although I don't like to give up and working through these 'bug'issues only make me smarter, I couldn't see spending more time on it.
Thanks for everyone's assistance. You can check out my setup here.
http://engineeringgeek.com/wiki/index.php/Squid
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Yes, I do have the acl's for the safe ports. I don't know why they weren't posted.
Here is my squid.conf with the safe ports and http_access allow geek_net and the specific ip 192.168.1.105..
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http_port 192.168.1.111:3128 transparent
hierarchy_stoplist cgi-bin ?
acl QUERY urlpath_regex cgi-bin \?
cache deny QUERY
acl apache rep_header Server ^Apache
broken_vary_encoding allow apache
access_log /var/log/squid/access.log squid
debug_options ALL,1, 32,2
hosts_file /etc/hosts
refresh_pattern ^ftp: 1440 20% 10080
refresh_pattern ^gopher: 1440 0% 1440
refresh_pattern . 0 20% 4320
acl all src 0.0.0.0
acl manager proto cache_object
acl localhost src 127.0.0.1/255.255.255.255
acl to_localhost dst 127.0.0.0/8
acl SSL_ports port 443 # https
acl SSL_ports port 563 # snews
acl SSL_ports port 873 # rsync
acl Safe_ports port 80 # http
acl Safe_ports port 21 # ftp
acl Safe_ports port 443 # https
acl Safe_ports port 70 # gopher
acl Safe_ports port 210 # wais
acl Safe_ports port 1025-65535 # unregistered ports
acl Safe_ports port 280 # http-mgmt
acl Safe_ports port 488 # gss-http
acl Safe_ports port 591 # filemaker
acl Safe_ports port 777 # multiling http
acl Safe_ports port 631 # cups
acl Safe_ports port 873 # rsync
acl Safe_ports port 901 # SWAT
acl purge method PURGE
acl CONNECT method CONNECT
http_access deny all
acl geek_net src 192.168.1.0/24
acl geekjr src 192.168.1.105
http_access allow geek_net
http_access allow geekjr
http_access deny !Safe_ports
http_access allow CONNECT SSL_PORTS
http_access deny purge
http_access allow purge localhost
http_access deny manager
http_access allow all manager localhost
http_access allow localhost
http_reply_access allow all
icp_access allow all
cache_effective_user administrator
cache_effective_group administrator
visible_hostname geekserver1.engineeringgeek.com
coredump_dir /var/spool/squid
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