I was saying that in transparent proxy you need NAT. that is actually packet routing + proxy + redirecting routed packet to proxy.
So here your NAT not seems to be working.
About internet link .. i mean what is the device which is connected to internet.. like eth0 or eth1 or ppp0 ?
And also which nic is local link ? is it eth1, eth0 etc.
I have asked such to give you little solution.