Squid in transparent mode fails for me as well - in general, not in Azure. I am running 2.4.1-RELEASE (amd64). I also use squidGuard.
What I observed was that requests (downloads from LAN which should get caught by squid) bypass squid and get downloaded via WAN. They do no appear in the Real Time monitor (because no traffic at all shows up in the Real Time monitor). SquidGuard blocking does also not work.
I tried to disable squid (Unchecked "Check to enable the Squid proxy.", hit Save) and re-enable it, but that didn't solve it.
I tried to disable transparent mode (while keeping squid enabled, so I unckecked "Enable transparent mode to forward all requests for destination port 80 to the proxy server.", hit Save), then re-abled it (checked "Enable transparent mode to forward all requests for destination port 80 to the proxy server.", then hit Save), and, yes, suddenly transparent mode worked!
Until the next reboot at least.
I then re-disabled transparent mode, and re-enabled it again, and it was up again (content from the disk cache was getting served from the cache in transparent mode right away).
Obviously, this workaround sucks a bit. I wonder if this could be automated…or fixed. :D
Note that disabling transparent mode will clear the data "Bypass Proxy for These Source IPs" and "Bypass Proxy for These Destination IPs"! if you have anything in there, be sure to put in into the clipboard first. Or else you have to pull it from your config history. The XML tags are <defined_ip_proxy_off>and <defined_ip_proxy_off_dest>.
Edit: it seems that doing changes in the WebGUI also causes transparent mode to stop working. I can not see whether a certain change did trigger this, as several changes occured around the time when squid stopped working in transparent mode. In any case, disbaling and re-enabling transparent mode did the trick to (temporarily) fix transparent mode.
Another edit: it looks like having entries in "Bypass Proxy for These Source IPs" and "Bypass Proxy for These Destination IPs" breaks transparent mode. As the disable/re-enable cycle clears these fields, transparent mode works again…until I re-enter the required IP ranges back into these fields. Then transparent mode is disabled again.
I then tried to delete the content in "Bypass Proxy for These Source IPs" and "Bypass Proxy for These Destination IPs" (without disabling/re-enabling transparent mode) and, yes, transparent mode suddenly started working again. Oh well.</defined_ip_proxy_off_dest></defined_ip_proxy_off>