Unusual issue with localhost:3000 after watching ruby on rails 4 tutorial: Lynda.com
This is how I have always set up my rails projects, using SQLite in your test and development will save you this heartache!

#   Ensure the SQLite 3 gem is defined in your Gemfile
#   gem 'sqlite3'
development:
  adapter: sqlite3
  database: db/development.sqlite3
  pool: 5
  timeout: 5000

# Warning: The database defined as "test" will be erased and
# re-generated from your development database when you run "rake".
# Do not set this db to the same as development or production.
test:
  adapter: sqlite3
  database: db/test.sqlite3
  pool: 5
  timeout: 5000

production:
  adapter: mysql2
  encoding: utf8
  database: #your db name
  username: #your db username
  password: #your db password
  host: #your db hostname
  port: 3306