It looks like the access model for MySQL has changed between F17 and F18.

openstack-db fails with a permission on the root user.  However, the following works:

1. As the keystone user (I suspect the openstack-db call made the keystone user, or maybe that is done by the RPM install?)
2. run mysql,  (no params, using the default identification, which I assume is PAM based?)
3. create a user named keystone.
4. and grant that user perms to create a db.

su - keystone
mysql

create user 'keystone'@'localhost' identified by 'keystone';
grant all  PRIVILEGES on *.* to 'keystone'@'localhost';

exit mysql and log in as that user:

mysql --user=keystone --password=keystone

Create the keystone database:

create database keystone;

Log out and run the dbsync

keystone-manage db_sync

Obviously, this leaves the DB User with too many permissions, but it is a start.

If I now try to run the command

openstack-db --service glance --init
Please enter the password for the 'root' MySQL user:

Even setting the password in MySQL doesn’t work

UPDATE mysql.user SET Password=PASSWORD('keystone') WHERE User='root' AND Host='localhost';

[root@f18-keystone mysql]# openstack-db --service glance --init
Please enter the password for the 'root' MySQL user:
ERROR 1045 (28000): Access denied for user 'root'@'localhost' (using password: YES)
Failed to connect to the MySQL server.  Please check your root user credentials.

I tried it with the unix password as well.

Note that I can connect using the following SQL Alchemy URL:

connection = mysql://keystone:keystone@localhost/keystone?unix_socket=/var/lib/mysql/mysql.sock

I think this is preferable to exposing TCP sockets around in the case that the Keystone server and MySQL server are co-located.