Instead of the reward please try these instructions (which work for me) and then write a blog post or a new section in the online book. :-)
1) install mysql (on mac "brew install mysql")
2) start mysql (on mac "mysql.server start")
3) sudo mysql
mysql> CREATE USER 'testuser'@'localhost' IDENTIFIED BY 'foo';
mysql> CREATE DATABASE mydatabase;
mysql> GRANT INSERTON *.* TO 'testuser'@'localhost' IDENTIFIED BY 'foo';
4) download the trunk web2py and trunk dal
5) copy web2py/examples/app.yaml web2py/app.yaml and call your app "myappname"
6) copy web2py/handlers/gaehandler.py web2py/gaehandler.py
7) make a new app called test which is a clone of welcome and create a new model file which contains:
db1 = DAL('google:sql://testuser:yourappname/mydatabase')
8) start web2py with:
dev_appserver.py ./ --mysql_user=testuser --mysql_password=foo
I just did all the steps and it works for me. I had to comment two lines in the google sql adapter because they removed the charset argument from the connector.
Massimo