I have to say it's not the gre encapsulation that's causing problems, as I've captured via tcpdump the packets being forwarded from the gre tunnel to the Squid's listening port, and they look pretty much normal AFAICT. But then you're probably more experienced in this :-) Anyhow I will keep investigating this on my end, hopefully I can find out something more. FYI there has been people who have managed to get it working purportedly on 2.6v1 by applying certain patches: http://www.squid-cache.org/mail-archive/squid-users/200607/0070.html Although i've no idea how to apply the patch, and it's not clear whether he uses wccp or something else. The bug was supposedly fixed in v2. regards, woon