[squid-users] Transparent Proxying Weirdness

I have already setup squid + iptables to work as a transparent proxying. But i have made an enhancement (kinda), squid now listens on port 8080 and dansguardian listening of port 3128. Ive done this because i dont want to reconfigure all workstations here, so they believe that they are still connecting to squid. So i redirected port 80 to port 3128 (dansguardian) on all workstations ip addresses, the weird thing is that i have this message from squid;

While trying to retrieve the URL: http://www.yahoo.com/

The following error was encountered:

Unable to determine IP address from host name for www.yahoo.com
The dnsserver returned:

DNS Domain 'virtual' is invalid: Host not found (authoritative).
This means that:

 The cache was not able to resolve the hostname presented in the URL.
 Check if the address is correct.

Could someone help me out on this?

SQUID
httpd_accel_host virtual
httpd_accel_port 80
httpd_accel_single_host on
httpd_accel_with_proxy on

iptables
iptables -t nat -A PREROUTING -s 192.168.100.0/24 -i $INT -p tcp --dport 80 -j REDIRECT --to-port 3128

TIA

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