PEAR DB not working with recently upgraded MySQL 4.1

>I recently upgraded from MySQL 3.23 to 4.1. Now db is not working
>properly. I'd very much like your help in solving this issue!
>
Here's the code I used to test it:
>
require_once 'DB.php';
$db =&
DB::connect('mysql://user:password@localhost/dbname');
if (PEAR::isError($db)) {
die($db->getMessage());
}
$res =& $db->query('SELECT * FROM table');
if (PEAR::isError($res)) {
die($res->getMessage());
}
>
The error message I get:
DB Error: insufficient permissions
>
I have this username in MySQL 4.1 set up in mysq.user in the old style
(pre MySQL 4.1) password. This user has no right in the user table and
SELECT rights in the db table for this dbname. This is the way it always
worked in the past.
>
This is different, I think, from my previous post about php not working
with MySQL 4.12 because I have that working now - php4.4.4 is workingon my
machine with MySQL 4.1 yet Pear DB is not.
>
I verified the password by UPDATE setting it using OLD_PASSWORD() and
flushing privileges.
>
Any ideas what I can do to solve this issue?
>
Many thanks in advance!
>