mongrel + mysql can't connect in custom mysql install

That error looks more like a mysql gem and ruby 1.9 compatibility
issue.

Have a look at this site http://isitruby19.com/mysql that talks about
issues with Ruby 1.9

Same on 1.8.6p287 - OSX (Leopard)

:⋋ ruby --version
ruby 1.8.6 (2008-08-11 patchlevel 287) [universal-darwin9.0]

Built gem with:
:⋋ sudo env ARCHFLAGS="-arch x86_64" gem install mysql -- --with-mysql-
config=/usr/local/mysql/bin/mysql_config

:⋋ ls -al /usr/local/mysql
lrwxr-xr-x 1 root wheel 27 Oct 6 12:35 /usr/local/mysql@ ->
mysql-5.1.39-osx10.5-x86_64

/!\ FAILSAFE /!\ Thu Oct 08 20:08:56 +0200 2009
  Status: 500 Internal Server Error
  uninitialized constant MysqlCompat::MysqlRes
    /Library/Ruby/Gems/1.8/gems/activesupport-2.3.2/lib/active_support/
dependencies.rb:440:in `load_missing_constant'
    /Library/Ruby/Gems/1.8/gems/activesupport-2.3.2/lib/active_support/
dependencies.rb:80:in `const_missing'
    /Library/Ruby/Gems/1.8/gems/activerecord-2.3.2/lib/active_record/
connection_adapters/mysql_adapter.rb:9:in `define_all_hashes_method!'
    /Library/Ruby/Gems/1.8/gems/activerecord-2.3.2/lib/active_record/
connection_adapters/mysql_adapter.rb:71:in `mysql_connection'
...
    /Library/Ruby/Gems/1.8/gems/mongrel-1.1.5/lib/mongrel.rb:268:in
`run'
    /Library/Ruby/Gems/1.8/gems/rack-1.0.0/lib/rack/handler/mongrel.rb:
34:in `run'
    /Library/Ruby/Gems/1.8/gems/rails-2.3.2/lib/commands/server.rb:111
    /Library/Ruby/Site/1.8/rubygems/custom_require.rb:31:in
`gem_original_require'
    /Library/Ruby/Site/1.8/rubygems/custom_require.rb:31:in `require'
    script/server:3

oc