Bumped this thread as it was the first link that appeared on google when having a similar problem and searching on "source create_all.sql". What was needed in my case was to "use planeshift". Once positioned in the database then the command worked fine. When simply following through the steps in the compiling guide the same error occurred for me too. It is an obvious step when one is used to MySQL yet may be worth a mention in the guide for those less familiar with MySQL.
- Nova