I'm getting the following error when I start rails server:

$ rails server
/Users/ssmith/.rvm/gems/ruby-1.9.2-p0/gems/mysql2-0.2.6/lib/mysql2.rb:7:in `require':     dlopen(/Users/ssmith/.rvm/gems/ruby-1.9.2-p0/gems/mysql2-0.2.6/lib/mysql2/mysql2.bundle, 9): Library not loaded: libmysqlclient.16.dylib (LoadError) 
Referenced from: /Users/ssmith/.rvm/gems/ruby-1.9.2-p0/gems/mysql2- 0.2.6/lib/mysql2/mysql2.bundle
Reason: image not found - /Users/ssmith/.rvm/gems/ruby-1.9.2-p0/gems/mysql2-    
0.2.6/lib/mysql2/mysql2.bundle

I've installed mysql2 with the following command after the rvm use ruby-1.9.2-p0 command:

$ gem install mysql2 -- --with-mysql-dir=/usr/local/mysql --with-mysql-config=/usr/local/mysql/bin/mysql_config
Building native extensions.  This could take a while...
Successfully installed mysql2-0.2.6
1 gem installed
Installing ri documentation for mysql2-0.2.6...
Enclosing class/module 'mMysql2' for class Client not known
Installing RDoc documentation for mysql2-0.2.6...
Enclosing class/module 'mMysql2' for class Client not known

I have mysql2 in my Gemfile as well as in the database.yml file and bundle install completes fine

$ bundle show mysql2
/Users/ssmith/.rvm/gems/ruby-1.9.2-p0/gems/mysql2-0.2.6

I understand the rails server error is due to it not knowing the mysql_config location on OSX, however on gem install I specified the correct location. Yet RVM's gem is not respecting that mysql_config location it seems.

Anyone have a solution to this?

Thanks in advance.

Scott