Upgrading PHP, MySQL old-passwords issue

I've inherited a Windows 2k3 server running an XAMPP-installation from the stone age. I needed to upgrade PHP to facilitate an upgrade to MediaWiki to facilitate a new MediaWiki extension (to facilitate some documentation to facilitate doing my job to facilitate getting paid to facilit... you get the idea).

However... installing a new version of PHP resulted in PHP's MySQL libraries refusing to communicate using MySQL's 'old style' 152-bit passwords. Not a problem in theory. The MySQL installation is post-4.1, so it should have the functionality to upgrade the user's passwords from 152-bit to 328-bit (what a weird hashing algorithm...).

I ran the following:

SET PASSWORD = PASSWORD('foo');

on MySQL but querying:

SELECT user, password FROM mysql.user;

returned just the same password I started out with - 152-bit. Now... I suspect you're thinking 'AHA! old-passwords is on!'. Unfortunately it's not - I've disabled it in the configuration (explicitly set it to 0), made doubly sure I have an absolute reference to that configuration file and ensured the service isn't using the --old-passwords flag. The service was reset after each and every operation.

So I went onto another system and generated the 328-bit hash on there, copying the hash over to the first MySQL instance. Unfortunately, that didn't work either (I did remember to FLUSH PRIVILEGES).

The application error is:

"'mysqlnd cannot connect to MySQL 4.1+ using the old insecure authentication. Please use an administration tool [...snip...]

Is there anything else I can try to get PHP to recognise MySQL as not using the 'old insecure authentication'? MySQL seems to be stuck in 'old-passwords' mode and I can't get it out of it.