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Ok all, I FIXED IT!
After a LONG battle with this issue, I finally found the issue, and it has to do with the OLD_PASSWORD directive...
I did this from the DOS command line...
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type MySQL -u root -p
-password: your-password(press enter)
mysql> UPDATE mysql.user SET Password = OLD_PASSWORD('your_pass')
-> WHERE Host = 'localhost' AND User = 'root';
mysql> FLUSH PRIVILEGES;
mysql>\q
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Worked like a champ!!!
Steve