Snow Leopard, PHP and MySQL

Ok, so I just installed Snow Leopard after having used Leopard. I'm using PHP to connect to a MySQL server elsewhere, which has worked fine with the built in PHP in Leopard, but in Snow Leopard I get this:

Warning: mysql_connect(): OK packet 6 bytes shorter than expected in script.php on line 3

Warning: mysql_connect(): mysqlnd cannot connect to MySQL 4.1+ using old authentication in script.php on line 3

Googling a bit, I have learned that this has something to do with old and new password in MySQL, but I don't seem to be able to find reliable information onhow to remedy it.

The Snow Leopard built in version of PHP is 5.3.0:

sandman> php -v
PHP 5.3.0 (cli) (built: Jul 19 2009 00:34:29)
Copyright (c) 1997-2009 The PHP Group
Zend Engine v2.3.0, Copyright (c) 1998-2009 Zend Technologies

The MySQL server I'm running is a 5.0.33 Source distribution that I've complied myself, running on OSX 10.4 Server

When connected to the MySQL server, and running this command:

> select User, Host, length(Password) from mysql.user where User='sandman';

I get this:

| User    | Host          | length(Password) |
| sandman | 1.2.3.%    |               16 |

Which apparently means that this is the old format (or it would have said 41). But how do I update it?

> set password for 'sandman'@'1.2.3.%' = password('pass');

Won't change the above information. /etc/my.cnf doesn't have a setting for using the old passwords and neither do the startup arguments.

What am I missing? How do I get Snow Leopard to use the MySQL server?