So I know that there is a very similar question to this all over the web as well as stack overflow:
Error Access denied for user MySQL server?
But my question I think is different. So I have set up a linked server and it works. I have the correct permissions set up for my IP's that I am using. However the problem arises when our user "webuser@correctIP" tries to access it. Therefore, any user using window authentication is allowed to access it and works great. But any that are not using windows authentication are blocked.
However, I have tried all the common solutions such as setting up a strict password, changing security settings in Microsoft SQL Server etc. Nothing is working.
FYI: I am using this from Microsoft SQL Server 2008 -> mysql (through phpMyAdmin)
What I needed to do was to create a new user for my linked servers database(user for the mysql database). Then I had to set up that user in the security section of the linked server properties box. Once I created my new user and then chose "Be made using this security context:" and then added my newly created user and password it worked great. If you have any question please just ask. Thanks