can't install mysql2 gem! Failed to build gem native extension

Question

Been trying to install the mysql2 gem for couple of days, let me tell you where I am stuck and describe the steps I took. The CMD command that throws an error is: gem install --http-proxy http://web1-proxy:8088 mysql2 !!

Error description:

Error installing mysql2:
        ERROR: Failed to build gem native extension.

        C:/Ruby193/bin/ruby.exe extconf.rb
checking for ruby/thread.h... no
checking for rb_thread_blocking_region()... yes
checking for rb_wait_for_single_fd()... yes
checking for rb_hash_dup()... yes
checking for rb_intern3()... yes
checking for mysql_query() in -lmysqlclient... no
checking for main() in -lm... yes
checking for mysql_query() in -lmysqlclient... no
checking for main() in -lz... no
checking for mysql_query() in -lmysqlclient... no
checking for main() in -lsocket... no
checking for mysql_query() in -lmysqlclient... no
checking for main() in -lnsl... no
checking for mysql_query() in -lmysqlclient... no
checking for main() in -lmygcc... no
checking for mysql_query() in -lmysqlclient... no
*** extconf.rb failed ***
Could not create Makefile due to some reason, probably lack of
necessary libraries and/or headers.  Check the mkmf.log file for more
details.  You may need configuration options.

To begin from the start, I installed Ruby 1.9.3, then Rails 4.1.1.

How I installed Ruby:

• From rubyinstaller.org (downloads) I took rubyinstaller-1.9.3-p448.exe
• Checked "Add Ruby executables to your PATH" and "associate .rb and .rbw files with this ruby installation"
• From the same page I installed the Dev Kit (DevKit-tdm-32-4.5.2-20111229-1559-sfx.exe) in C:\RubyDevKit
• I went to RubyDevKit in cmd and typed:
  • dir dk.rb
  • ruby dk.rb init
  • ruby dk.rb install
• I launched irb (typed irb in C:\RubyDevKit) to confirm ruby works and it does.

How I installed rails:

• Went to C:\Ruby193\bin from cmd and typed: gem install rails
• this threw an error (established connection failed because connected host has failed to respond) which I fixed by going to Internet Options - Connections - LAN Settings - Out of the 4 options, I only checked the last 2 options: Use a proxy server for your LAN (address: web1-proxy, port number given to me by the IT)
• After this I migrated from CMD to "c:\Sites" and typed: set HTTP_PROXY=http://web1-proxy:8088
• Then: From CMD C:\Ruby193\bin> gem install --http-proxy http://web1-proxy:8088 rails
• Then: C:\Sites> rails new app2
• to confirm it works: C:\Sites\app2> rails server

Installation steps I followed for Mysql:

• From http://dev.mysql.com/downloads/mysql/ (Note: MySQL Installer is 32 bit, but will install both 32 bit and 64 bit binaries.) Picked the smaller package and RAN the file. During the installation:
• Chose “developer default”
• on the next page agreed to installing pre-requirements (MySql Server, .NET, Connectors etc).
• Config Type = “Development Machine”; I checked: “Enable TCP/IP Networking”, Port number = 3306, checked: Open Firewall port for network access.
• Set MySql root pwd; didn’t add user at this stage
• Windows Service name: MySQL 55, Ran MySQL Server at System startup; Ran Win Service as: Standard System Account

• Didn’t start MySql workbench after setup

• The ODBC Connector 5.3.2 failed to install during the mysql installation, so afterwards I followed this workaround: http://dev.mysql.com/downloads/connector/ . Clicked on the "Connector/ODBC" link. Made sure "Select Platform" showed "Microsoft Windows". Clicked on the appropriate download button for MSI Installer. After downloading ran the .msi file.

How I debugged my problem so far:

• Copied libmysql.dll from C:\Program Files\MySQL\MySQL Server 5.5\lib to C:\Ruby193\bin and tried again - no luck
• Copied also the libmysql.lib file from C:\Program Files\MySQL\MySQL Server 5.5\lib to C:\Ruby193\bin and tried again - no luck
• Tried gem install --HTTP-PROXY http://web1-proxy:8088 mysql2 --no-rdoc --no-ri -- '--with-mysql-lib="C:\Program Files\MySQL\MySQL Server 5.6\lib\" --with-mysql-include="C:\Program Files\MySQL\MySQL Server 5.6\include\"' - no luck
• Tried all 3 of the above solutions with previous versions of mysql installed (using again the installer) and with previous ODBC Connectors.

Help!!