> I haven't tried restarting yet - but given that "ping localhost" works
> with the firewall(s) in place do you still think that this is my problem?

  It could still be, so the restarting with all Firewalling off should
still be tried.

>
> I still think that the "Permission denied" message is caused by file
> ownership problems - but where?
>
>

 There shouldn't be if SquidGuard runs under the same user as squid
(defined in squid.conf).
 Btw, do you start SQUID as root ?
 Even if no privileged port is used for http-receiving,  I would still
start as root. I am
 not sure whether this inter process communication , which goes via
 the loopback interface , may need root privilege to create the socket.

 I am not sure about that.

 M.

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