transparent web proxy seems to break things

[Josh Osborne]

I'm attempting to set up a transparent web proxy under 5.1 using
the user land ppp and squid.  I am already using that FreeBSD box
for ppp and NATing.  I also have squid set up and it seems to work
when I manually configure the web clients (but not all the web
clients in the house can be configured, and it is a pain to set
and reset on laptops when going from home to work and stuff).

I used pppctl to add the rule:
 nat proxy type no_encode port 80 server 127.0.0.1:3128 proto tcp src 10.0.0.29

and web browsing promptly stopped working.  I deleted that (with
"nat proxy delete rule 0" -- I think), and browsing started working
again, then I put it back with:
 nat proxy type no_encode port 80 server 10.0.0.1:3128 proto tcp src 10.0.0.29

and web browsing stopped again.  I also did it without "src 10.0.0.29"
and that just ends up stopping all browsing in all the machines,
and upsets other people in the house who no longer think letting
me mess with FreeBSD as a server is such a good idea :-)

To remove any possiable misconfiguration of squid from the picture
I also give it a shot with squid disabled and ttcp (which does lots
of stuff, but in this case was just set to show incomming connections
and any data on them) listing on 3128.  When I attempted browsing
I got nothing on the web client (as expected), and nothing showed
up from ttcp. So the proxying is stopping the packets from going
direct, but they are also not (as far as I can tell) sent where I
asked them to go!

So can anyone tell me what I'm doing wrong?  Or maybe a better way to
set up transparent web proxying?