I know this is an old post - but I am going through exactly the same issues - and I believe there is a problem with special characters in the password field at the point of config where it must pass the password value.
I was doing exactly the same thing - copying/pasting the DB username and passwords directly from my
VB config file into the photopost config screen - and EVERY TIME it would not connect - I also verified no trailing or leading spaces, slashes, etc - but I did finally notice that if I re-entered the installation screen fresh - all the values were set as I had set them EXCEPT the password field - and every time - it truncated the password value I had typed/pasted after the $ sign, leaving only the first three alpha characters in the password field.
Once I created a new DB user and gave that an alpha-only password - it went right through.