not sure if this is a question better suited for serverfault but I\'ve been messing with amazon RDS lately and was having trouble getting \'file\' privileges to my web host
I ran into similar issues. I was in fact trying to import a database but the conditions should be the same - I needed to use load data due to the size of some tables, a spotty connection, and the desire for a modest resume functionality.
I agree with chris finne that not specifying the local option can lead to that error. After many fits and starts I found that the mk-parallel-restore tool from Maatkit provided what I needed with some excellent extra features. It might be a great match for your use case.