Unable to complete Installation

Hello,
a little help here with Drupal.
Here is an error message I keep getting.

Message Number 1
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Failed to connect to your MySQL database server.
MySQL reports the following message: Permission denied.
Are you sure you have the correct username and password?
Are you sure that you have typed the correct database hostname?
Are you sure that the database server is running?
For more help, see the Installation and upgrading handbook.
If you are unsure what these terms mean you should probably contact your hosting provider.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

My response is:

1. I have used the correct username and password.

2. I have set up all the GRANTS for the username;
mysql -umydrupal -pcatwhiskers
USE mydatabase
SHOW GRANTS
+---------------------------------------------------------------------------------------------------------------------------------------+
| Grants for mydrupal@localhost |
+---------------------------------------------------------------------------------------------------------------------------------------+
| GRANT USAGE ON *.* TO 'mydrupal'@'localhost' IDENTIFIED BY PASSWORD '*7BC6060EEE2453F724B253CD31E8E644F862898E' |
| GRANT SELECT, INSERT, UPDATE, DELETE, CREATE, DROP, INDEX, ALTER, CREATE TEMPORARY TABLES ON `mydatabase`.* TO 'mydrupal'@'localhost' |
+---------------------------------------------------------------------------------------------------------------------------------------+

I set up all from the console. When I go back to the gui (Linux - Slackware 13.37 - 64 bit version)
and I run the install.php I recieve the message above (number 1).

I have made an adjustment in httpd.conf and commented out mod_rewrite.
I set permissions on session.php as per instructions.

root@lollipop:/srv/httpd/htdocs/sites/default# ls settings.php -l
-rw-r--rw- 1 root root 10310 Apr 30 15:07 settings.php
root@lollipop:/srv/httpd/htdocs/sites/default#

As I am learning and this is not a production server and is only vulnerable to my stupidity I have not
changed the group or user.

Please help me, it has to be something simple I am missing and it is probably absurdly obvious.

David.