it looks like he reason for behavior is that mysql_install_db.exe failed, because when it ran mysqld in bootstrap mode, mysqld died it wrote something about lc-message-dir being used and that this is deprecared, but since installation works everywhere else, it should not be reason for sudden mysqld death.

Now we can:
1) Trying to localize the error. I put together a package that is a bit more verbose, and should include the output of mysqld.exe and the exact command line , when installer runs in logging mode
Would you like to run it, as before from the command line with msiexec ? That might help actually.
The package is on my SkyDrive here https://skydrive.live.com/#cid=FF0C950417B4F8A4&id=FF0C950417B4F8A4%21110

2) You can install binaries, but deselct "Database Instance" in MSI Feature tree. The result us that after the installation there won't be a running database, only binaries.

You can create an instanse with mysql_install_db.exe
mysql_install_db.exe --datadir=<dir> --password=<password> --service=<service>, as described in the MariaDB documentation https://kb.askmonty.org/en/mysql_install_dbexe/

There is no guarantee that it does not die though, because during MSI installation the same exact command died. However command line is much nicer to get the error reproduced than MSI, so we can look further.

Please indicate if you would like 1) or 2).

thanks,
Wlad

tried the "31" install ... same results ... here is the log.

The result is the same because the bug is not yet identified. At the moment we just tracing it.

And the log is more useful than previous one, you can find
CAQuietExec: ERROR: 1049 Unknown database 'mysql'
CAQuietExec: 130509 13:15:20 Aborting

there. This means that 'mysql' directory creation has failed on some reason. this is becoming interesting.
Would you mind, if I ask you to try out another installer, some time next week? I need to add some more trace to catch the bug.

Glad to help out in any way I can.

Would you mind if we communicated via email?

Note to myself :

this is an old bug http://bugs.mysql.com/bug.php?id=20597, which was never fixed. The TEMP directory on this particular machine is D:~\TMP. Paths with tilde have special handling in cleanup_dirname() function in mf_pack.c (this function is used in init_tmpdir) . The special handling consists of removing the part prior to tilde character. I think in some circumstances, tilde can be expanded , at least there is expand_tilde() function I'm not sure whether fixing tilde handling with removing it is appropriate (probably can break something). In any case, I can disable tilde-directories in installer, and complain loudly before mysql_install_db.exe is called.