--- src/protos.h.orig	2006-11-07 13:24:18.000000000 +0800
+++ src/protos.h	2006-11-07 13:44:07.000000000 +0800
@@ -154,6 +154,7 @@
 extern void comm_lingering_close(int fd);
 #endif
 extern void commConnectStart(int fd, const char *, u_short, CNCB *, void *);
+extern void commConnectStart2(int fd, const char *, u_short, CNCB *, void *, struct in_addr *addr);
 extern int comm_connect_addr(int sock, const struct sockaddr_in *);
 extern void comm_init(void);
 extern int comm_listen(int sock);
--- src/structs.h.orig	2006-11-08 14:58:40.000000000 +0800
+++ src/structs.h	2006-11-08 14:58:42.000000000 +0800
@@ -886,6 +886,7 @@
 	unsigned int nodelay:1;
 	unsigned int close_on_exec:1;
 	unsigned int backoff:1;	/* keep track of whether the fd is backed off */
+	unsigned int dnsfailed:1;	/* did the dns lookup fail */
     } flags;
     comm_pending read_pending;
     comm_pending write_pending;
--- src/forward.c.orig	2006-11-07 13:24:51.000000000 +0800
+++ src/forward.c	2006-11-08 15:08:45.000000000 +0800
@@ -338,8 +338,11 @@
 	 * Only set the dont_retry flag if the DNS lookup fails on
 	 * a direct connection.  If DNS lookup fails when trying
 	 * a neighbor cache, we may want to retry another option.
+	 *
+	 * If this is a transparent connection, we will retry using the client's
+	 * DNS lookup
 	 */
-	if (NULL == fs->peer)
+	if ((NULL == fs->peer) && !fwdState->request->flags.transparent)
 	    fwdState->flags.dont_retry = 1;
 	debug(17, 4) ("fwdConnectDone: Unknown host: %s\n",
 	    request->host);
@@ -522,6 +525,9 @@
     if (fd == -1)
 	fd = pconnPop(name, port, domain, NULL, 0);
     if (fd != -1) {
+	/* Don't cache if the returned fd does not have valid DNS */
+	if (fd_table[fd].flags.dnsfailed)
+	    storeRelease(fwdState->entry);
 	if (fwdCheckRetriable(fwdState)) {
 	    debug(17, 3) ("fwdConnectStart: reusing pconn FD %d\n", fd);
 	    fwdState->server_fd = fd;
@@ -618,7 +624,18 @@
 #endif
 	hierarchyNote(&fwdState->request->hier, fs->code, fwdState->request->host);
     }
-    commConnectStart(fd, host, port, fwdConnectDone, fwdState);
+
+    /*
+     * If we are retrying a transparent connection that is not being sent to a
+     * peer, then don't cache, and use the IP that the client's DNS lookup
+     * returned
+     */
+    if(fwdState->request->flags.transparent && fwdState->n_tries && (NULL == fs->peer)) {
+	storeRelease(fwdState->entry);
+	commConnectStart2(fd, host, port, fwdConnectDone, fwdState, &fwdState->request->my_addr);
+    } else {
+	commConnectStart(fd, host, port, fwdConnectDone, fwdState);
+    }
 }
 
 static void
--- src/comm.c.orig	2006-11-07 13:14:20.000000000 +0800
+++ src/comm.c	2006-11-08 15:08:36.000000000 +0800
@@ -270,14 +270,26 @@
 void
 commConnectStart(int fd, const char *host, u_short port, CNCB * callback, void *data)
 {
-    ConnectStateData *cs;
     debug(5, 3) ("commConnectStart: FD %d, %s:%d\n", fd, host, (int) port);
+    commConnectStart2(fd, host, port, callback, data, NULL);
+}
+
+void
+commConnectStart2(int fd, const char *host, u_short port, CNCB * callback, void * data, struct in_addr *addr)
+{
+    ConnectStateData *cs;
     cs = cbdataAlloc(ConnectStateData);
     cs->fd = fd;
     cs->host = xstrdup(host);
     cs->port = port;
     cs->callback = callback;
     cs->data = data;
+    if(addr != NULL) {
+	cs->in_addr = *addr;
+	cs->addrcount = 1;
+    } else {
+	cs->addrcount = 0;
+    }
     cbdataLock(cs->data);
     comm_add_close_handler(fd, commConnectFree, cs);
     ipcache_nbgethostbyname(host, commConnectDnsHandle, cs);
@@ -288,13 +300,20 @@
 {
     ConnectStateData *cs = data;
     if (ia == NULL) {
-	debug(5, 3) ("commConnectDnsHandle: Unknown host: %s\n", cs->host);
-	if (!dns_error_message) {
-	    dns_error_message = "Unknown DNS error";
-	    debug(5, 1) ("commConnectDnsHandle: Bad dns_error_message\n");
+	/* If we've been given a default IP, use it */
+	if(cs->addrcount > 0) {
+	    fd_table[cs->fd].flags.dnsfailed=1;
+	    cs->connstart = squid_curtime;
+	    commConnectHandle(cs->fd, cs);
+	} else {
+	    debug(5, 3) ("commConnectDnsHandle: Unknown host: %s\n", cs->host);
+	    if (!dns_error_message) {
+		dns_error_message = "Unknown DNS error";
+		debug(5, 1) ("commConnectDnsHandle: Bad dns_error_message\n");
+	    }
+	    assert(dns_error_message != NULL);
+	    commConnectCallback(cs, COMM_ERR_DNS);
 	}
-	assert(dns_error_message != NULL);
-	commConnectCallback(cs, COMM_ERR_DNS);
 	return;
     }
     assert(ia->cur < ia->count);