That's what I thought it was too Matthew - since the hosts.frm file contains the users and passwords. So I copied all hosts.* files from a known good working installation and it made no difference.
Putting back the old files I noticed the log error was specifically "could not *read* hosts.frm" even though it was obviously there and obviously valid. I tested my theory on the good working machine by renaming hosts.frm - mysqld would not start but the error was "could not *find* hosts.frm". Aha! So I started thinking it has to do with access rights, disabled SELinux, and hey presto mysqld works again. It is obviously an Up2Date change to SELinux that didn't take effect until I rebooted, and now I need to narrow down the policy in question in order to re-enable SELinux without crippling my databases.
Have you tried relabelling your /var/lib/mysql directory? If you've copied in files from other places, they may not be labelled correctly.
# restorecon -R /var/lib/mysql
Paul.
