It's been a while since I set it up, but I made a few notes regarding the ports because, like you, I discovered some discrepancy.
9385 seems to be used by the proxy to talk to TOR (or other proxy chain) which is listening on 9050, with 8123 being the port users talk to the proxy on.
Something sort of jumps out to me. Your verbose output says:
proxyAddress atom 127.0.0.1 The IP address on which the proxy listens.
proxyPort integer 8123 The TCP port on which the proxy listens.
But I'm slightly at odds with this in your config:
I'd love to say that this may be to blame, but I can't be sure as the manual
is not wonderfully clear.
Do the logs give anything away?
Can you telnet to it, mash the keypad, and get any kind of response from it or does it kick you without connecting?
How are you talking to this proxy - direct on the local box itself, or is it running on a different box that should be listening on something other than the loopback address?
Are you unwittingly packet filtering and dropping the packets meant for the proxy?