So, to recap, yes I do want transparent authentication for my users (IE they don't get presented with an authentication box when they access the net). I stated as much in the original post. However it seems I can't have this Transparent on Green mode turned on if I want DG to work properly on the same box.
4.1.2 Transparent on <Interface>
If the transparent mode is enabled, all requests for the destination port 80 will be forwarded to the Proxy
Server without the need of any special configuration changes to your clients.
Note: Transparent mode works only for destination port 80. All other requests (e.g. port 443 for SSL) will
bypass the Proxy Server.
Note: When using any type of authentication, the Proxy may not run in transparent mode.
Note: To enforce the usage of the Proxy Server in non-transparent mode, you will have to block all outgoing
ports usually used for http traffic (80, 443, 8000, 8080, etc.).