service squid stop
rm -rf /var/spool/squid/* (removes cached files and directory structure)
rm -rf /var/log/squid/* (removes the logs)
squid -z (recreates the cache_dir structure)
service squid start
Doing the above can be helpful if you want to claw back some diskspace in a hurry.
If you wanted to shift the squid cache_dir you could edit squid.conf cache_dir to repoint it to another disk/partition before restarting.