Comment 2 for bug 566721

According to the log messages:

Setting up squid (2.7.STABLE7-1ubuntu12) ...
Installing new version of config file /etc/resolvconf/update-libc.d/squid ...
restart: Job failed to restart
dpkg: error processing squid (--configure):
 subprocess installed post-installation script returned error exit status 1

Was squid running before the upgrade? Could you look into squid log files to find out about the reasons why squid failed to start?

Could you try to start squid manually:

  sudo start squid

and report any error message?