Squid Cache: Version 2.5.STABLE4-20040211

Could someone please give me a pointer for the following DNS problems?

On startup cache.log reports:

2004/02/13 16:20:27| Starting Squid Cache version 2.5.STABLE4-20040211
for i686-pc-linux-gnu...
2004/02/13 16:20:27| Process ID 25708
2004/02/13 16:20:27| With 32768 file descriptors available
2004/02/13 16:20:27| Performing DNS Tests...
2004/02/13 16:20:27| Successful DNS name lookup tests...
2004/02/13 16:20:27| DNS Socket created at 0.0.0.0, port 33116, FD 4
2004/02/13 16:20:27| Adding nameserver x.x.x.x from /etc/resolv.conf
2004/02/13 16:20:27| Adding nameserver x.x.x.x from /etc/resolv.conf
2004/02/13 16:20:27| helperOpenServers: Starting 6 'adzapper' processes
2004/02/13 16:20:28| helperOpenServers: Starting 7 'ntlm_auth' processes

I try to browse somewhere and get:

The following error was encountered:

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

No DNS records

But on the proxy box itself get:

-bash-2.05b$ host www.ibm.com
www.ibm.com has address 129.42.20.99
www.ibm.com has address 129.42.21.99
www.ibm.com has address 129.42.16.99
www.ibm.com has address 129.42.17.99
www.ibm.com has address 129.42.18.99
www.ibm.com has address 129.42.19.99

Any ideas (or pointers to docs) would be appreciated! Thanks!

-sjm