What does your WPAD file look like?
Should be somewhat similar to this for the basics… Mine's a little different from the most basic, but this works fine for me, even when I have the option to block by IP addresses in the URL set, since the connections aren't proxied and are connecting directly.
function FindProxyForURL(url,host)
{
if(isPlainHostName(host))
{
return "DIRECT";
}
if(isInNet(host,"127.0.0.1","255.255.255.0"))
{
return "DIRECT";
}
if(isInNet(host,"192.168.0.0","255.255.255.0"))
{
return "DIRECT"
}
return "PROXY 192.168.1.1:3128";
}