I have done some hefty Google'ing and I can't seem to find a single solution to this issue that I cam currently experiencing. Here is a sample configuration from squid that I have:

#
# DIGEST Auth
#
auth_param digest program /usr/sbin/digest_file_auth /etc/squid/digpass
auth_param digest children 8
auth_param digest realm LHPROJECTS.LAN Network Proxy
auth_param digest nonce_garbage_interval 10 minutes
auth_param digest nonce_max_duration 45 minutes
auth_param digest nonce_max_count 100
auth_param digest nonce_strictness on
# Squid normally listens to port 3128
# Squid normally listens to port 3128
http_port 192.168.10.2:3128 transparent
https_port 192.168.10.2:3128 intercept
http_port 192.168.10.2:3130

As noted above, I have three ports defined, 2 of them are transparent/intercept and one is a regular http port (which I use for authentication). Which works rather well in this configuration however my logs are getting flooded of this entry authentication not applicable on intercepted requests whenever a transparent connection is made. So far, I can't seem to find any documentation that would describe how to suppress these messages ?