Thanks for your help, but yes my firehol.conf file does have that entry.
Here is my whole firehol.conf file:
I have had to use the 8082 port instead of 8080 as my web server runs on that port.
# $Id: client-all.conf,v 1.2 2002/12/31 15:44:34 ktsaou Exp $
# This configuration file will allow all requests originating from the
# local machine to be send through all network interfaces.
# No requests are allowed to come from the network. The host will be
# completely stealthed! It will not respond to anything, and it will
# not be pingable, although it will be able to originate anything
# (even pings to other hosts).
iptables -t filter -I OUTPUT -d 127.0.0.1 -p tcp --dport 3128 -m owner ! --uid-owner dansguardian -j DROP
transparent_squid 8082 "root root"
interface any world
client all accept
server cups accept
server webcache accept
Thanks again for your help