Networking :: Ubuntu Server 10.10 With Squid Not Completing Tcp Handshakes

I have an Ubuntu Server 10.10 machine running in-between my firewall and the rest of my network that monitors the internet connection and functions as a web cache.

It had been working for about a year, but started having an issue where no one (either from the server itself or from the local network) could connect to a website. Port 80 was the only one affected, which is forwarded via iptables to port 3128 for Squid.

After lots of trial and error, I thought to do a packet capture from the internet-side of the server (which I should've done in the first place!). Turns out the tcp handshake is not completed. The connection is started with a syn packet; the web server (google.com for example) responds with a SYN/ACK, and then nothing else is sent until the squid server tries again with another SYN packet. It repeats several times like that, then gives up and gives a connection timeout error message.

My iptables rules are as follows:

I'm no guru when it comes to iptables, and when I originally setup the server, I knew even less. So if something is wrong or at least could be done better with the rules please tell me. Also, I should note that I'm using bridge-utils to bridge the two ethernet interfaces. Squid is set as an intercepting (transparent) proxy.