I got Dansguardian working via the URL rewrite hack.
Edit /etc/dansguardian/lists/urlregexplist and add the following:
I also redirected the standard youtube.com homepage to youtube.com/education - so all the normal (and now blocked) video links don't appear. Redirecting to the education page everytime sorta shows everyone that it's not the "normal" youtube access.
Now Youtube just need to allow for proper proxy caching!