When fetching a PAC file, sometimes the server responds with a header "Transfer-Encoding: chunked" which is not correctly parsed by libproxy-0.4.7, which subsequently also assumes it in fact has fetched the PAC file and silently ignores the error. The actual problem is the parsed string, please apply the patch from fixed upstream issue 170: http://code.google.com/p/libproxy/issues/detail?id=170 until a new version comes out... Reproducible: Always
Should be fixed in libproxy-0.4.10, which was just added to portage.