--- This is a duplicate of a bug I posted in TCB Bugs by mistake! ---
When you try to: DROP DATABASE test; you get:
ERROR 1010 (HY000): Error dropping database (can't rmdir './test/', errno: 17)
The reason is that the "/usr/local/mysql/data/test" directory contains a superflous ".empty" file which MySql doesn't know about and leaves behind and can't therefore rmdir "test".
/usr/local/mysql/data/test is a copy of usr/local/mysql/tc/data/test.