[plug] log permissions and squid problem

[Arkem]

Here's an idle question and a long problem. What is the recommended 
permissions for log files and /var/log/? obviously -rw-rw-rw- is a 
security risk but who should have the permission to read logs, do 
logs need execute permissions? Things like that. (just a background, 
the computer this is refering to give access to only a few trusted 
users)

And now my problem brace yourselves!

Recently I've started having problems with squid, its been crashing 
out a few seconds after I've started it. Relevant portions of 
/var/log/messages and /var/log/syslog below:

- /var/log/messages
mornmist squid[5763]: Squid Parent: child process 5766 started
mornmist squid[5763]: Squid Parent: child process 5766 exited due to 
signal 6
mornmist squid[5763]: Squid Parent: child process 5768 started
mornmist squid[5763]: Squid Parent: child process 5768 exited due to 
signal 6
mornmist squid[5763]: Squid Parent: child process 5770 started
mornmist squid[5763]: Squid Parent: child process 5770 exited due to 
signal 6
mornmist squid[5763]: Squid Parent: child process 5773 started
mornmist squid[5763]: Squid Parent: child process 5773 exited due to 
signal 6
mornmist squid[5763]: Squid Parent: child process 5776 started
mornmist squid[5763]: Squid Parent: child process 5776 exited due to 
signal 6

- /var/log/syslog
mornmist squid[5770]: User-Agent logging is disabled. 
mornmist squid[5770]: Referer logging is disabled. 
mornmist squid[5770]: Cannot open '/var/log/squid/access.log' for 
writing. ^IThe parent directory must be writeable by the ^Iuser 
'proxy', which is the cache_effective_user ^Iset in squid.conf.
mornmist squid[5763]: Squid Parent: child process 5770 exited due to 
signal 6

It appears to me that squid is crashing because it can't write to the 
log files... but after a quick chmod of the log files (even changed 
the permissions to 666 and it didn't help) the problem wasn't solved 
and I'm all out of ideas.
(from ls -lh /var/log/squid)
-rw-r--r--    1 proxy    root            0 Nov 11 12:00 access.log
-rw-r--r--    1 proxy    root            0 Nov 11 12:00 cache.log
-rw-r--r--    1 proxy    root            0 Nov 11 12:00 store.log
(from ls -l /var/log)
drw-rw-rw-    2 proxy    proxy        4096 Nov 11 07:35 squid

With file permissions like this I can't see why it would be unable to 
write to the files.

Also as a bit of a side note it seems that exim is having a similar 
problem (an annoying problem which is proventing the mailserver from 
sending mail) which suggests that the problem lies with the 
permissions in /var/log rather than in squid (or exim's configs)

(once again from /var/log/syslog)
mornmist exim[5866]: 2001-11-11 12:03:43 162lqR-0001Wc-00 Cannot open 
main log file "/var/log/exim/mainlog": Permission denied: euid=8 
egid=8
mornmist exim[5866]: exim: could not open panic log - aborting: 
original error above

Permissions have been mucked around with but while trying to fix this 
problem logs have been set to -rw-rw-rw- permissions (for the moment)

Anyway does anyone have the slightest idea what may be going on here?

Many thanks in advance,
Paul

P.S (Extra thanks if you managed to read this far ^_^)