You know goosehunter, I've seen this problem before... your lucky I ran into this one too because it could take DAYS to resolve. 😃
Did you by chance download a new version of mySQL recently?
If so, the problem lies in the way passwords are stored in newer versions of mySQL.
This bug is so goddamn stupid that I cannot believe mySQL AB didn't test for this properly before release because it is so basic and falls within a smoke test acceptance phase (a testing phase where QA does not accept the release until it passes basic functionality).
Anyways, it has something to do with the administration's root password being stored differently under newer versions of mySQL. It requires for you to change the password and set a flag to tell the database system that your password should be interpreted under the old scheme.
Download MySQL Administrator off the mySQL site. Install it and run the program. Go to the Startup Variables section and click on the Security tab. Then, click the Use Old Passwords checkbox.
I think that should do it