Hi
I think , cache_dir in squid .conf is /var/spool squid in RHEL...but to make sure just chk it again...., I also told u that check permissions and owner of squid dir..........,as Ricky already said
if still it dont work..then do these step by step:,i thk it should work..
#rm -rf /var/spool/squid
#mkdir /var/spool/squid
#chown squid:squid /var/spool/squid
#restorecon -R /var/spool/squid (Don't use squid -z , if u r using this command)
#service squid start
Gaurav