mysql_upgrade was passing an non-initialized non-null tmpdir to create_temp_file() if no 
--tmpdir was specified. This prevents create_temp_file() from taking the system 
temporary file path and as a result mysql_upgrade was trying to open a file in a 
directory that it may not have write access to.
Fixed by making sure mysql_upgrade will pass a zero length temp dir string to 
create_temp_file() if no --tmpdir is specified.