Hi all I am bumping up this topic again because I made a few observations.
I have determined that Squid has an issue with multi segment downloading/Multithread downloading.
Testing with downthemall for firefox and metalink for chrome downloading a test file http://mirror.internode.on.net/pub/test/
When port 80 and 443 are blocked and all traffic is going through squid the download is limited to 1 segment resulting in slow download speed.
However when not going through squid then the segments are not limited to 1, resulting in being able to download 10x faster (because now I can connect to 10 segements).
I have also found that some software update programs which use multi segment downloading/Multithread downloading become slow at downloading.
Now this is the strange part, squid does support multi segment downloading/Multithread downloading, when downloading from youtube you are able to connect to multi segments and get full bandwidth.
So I guest the big question is is this a pfsense squid package issue or a squid-cache.org issue? Where should I post this bug/issue?