I\'m having trouble finding a solution to this problem. I\'m getting the error:
Please install the mysql adapter: \'gem install activerecord-mysql-adapter\'
I had the same problem as OP on OSX Lion after upgrading to Rails 3.2. Removing all gems, bundle install, etc did not work. Gemfile and database.yml were correctly specifying mysql2.
In the end, I deleted and recreated my database.yml and everything works again. It was probably a typo or hidden character in the file.