**There have been at least two Squibs born to two magical parents.**

(I’m basing this answer on the comments on @JasonBaker’s answer.)

* **Angus Buchanan.** Information on Pottermore [about Scottish rugby](http://pottermore.wikia.com/wiki/Scottish_Rugby) reveals the existence of a Squib in the pure-blood Buchanan family:

  > By the mid-nineteenth century the Buchanan family comprised an overworked mother, a fierce father and eleven children. The household was loud and chaotic, but even so, it is surprising that neither of the Buchanan parents realised that their third son, Angus, was a Squib – a wizard-born child with no magical powers. It had always been the proud boast of Mr Buchanan senior that such an anomaly had never occurred in their family. The proud old warlock went further: a Squib in any family was a sign that they were in decline and deserved to be winnowed out.

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  Particularly notable is that Angus got as far as the Sorting Ceremony at Hogwarts before he was outed as a Squib.

* **Marius Black.** She was a member of the notoriously blood-supremacist Black family, who was outed as a Squib and promptly blasted off the family tree.

  We see the blasted-off portion of the family tree in the *Order of the Phoenix* film. There was also a family tree produced by JK Rowling for charity, a copy of which [can be found on the HP Lexion](http://www.hp-lexicon.org/wizards/blackfamilytree.html). Both of her parents are still on the tree (so unlikely to be Squibs); the legend tells us that she was a Squib.

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There are very few named Squibs in canon (the others being Arabella Figg, Argus Filch, the Thurkell brothers and Dolores Umbridge’s brother). We don’t know enough about their parentage to say whether any of them had two magical parents.

(We know that Dolores Umbridge’s parents weren’t both magical; her [Pottermore entry](http://pottermore.wikia.com/wiki/Dolores_Umbridge) tells us that she was ashamed of her half-blood parentage and tried to conceal it.)