Setting up a dev environment locally

Hi all,
So I have a multisite install running online right now. I need to upgrade wordpress (from 3.3.1) and make some fairly major changes so I pulled the live database and the files and I’m trying to setup locally. before importing the database I did do a find and replace on the domain. but I think I’m still getting some path issues.

First:
when trying to access the site: localhost/fr/fci (localpath) it would redirect to the live site on the webserver. so I opened wp-config and made some edits. most of the time I was getting infinite redirect loops in FireFox, but managed to edit the file which now reads:

define( 'MULTISITE', true );
define( 'SUBDOMAIN_INSTALL', false );
$base = '/';
define( 'DOMAIN_CURRENT_SITE', 'localhost' );
define( 'PATH_CURRENT_SITE', '/fr/fci/' );
define( 'SITE_ID_CURRENT_SITE', 1 );
define( 'BLOG_ID_CURRENT_SITE', 1 );

This solve the redirect loops but throws an error “Error establishing database connection”

second:
with this new error most info online seems to be issues with the host, permissions or passwords. I can assure you none of these are the case. I copied and pasted directly into and out of phpMyAdmin and can login and out without issue. also this is my local machine, I have several sites I’m working on at the present time without issues.

troubleshooting I changed define( 'MULTISITE', true ); to false. and I managed to get the 404 page. There were errors including the search form php file and the style sheet did not load as that also 404’d – oddly I could copy and paste the href of the css file into my address bar and load the file… humm.

anyway I think this is a pathing issue and any guidance would be appreciated. and before you ask here is my current htaccess file:

RewriteEngine On
RewriteBase /
RewriteRule ^index\.php$ - [L]

# uploaded files
RewriteRule ^([_0-9a-zA-Z-]+/)?files/(.+) wp-includes/ms-files.php?file=$2 [L]

# add a trailing slash to /wp-admin
RewriteRule ^([_0-9a-zA-Z-]+/)?wp-admin$ $1wp-admin/ [R=301,L]

RewriteCond %{REQUEST_FILENAME} -f [OR]
RewriteCond %{REQUEST_FILENAME} -d
RewriteRule ^ - [L]
RewriteRule  ^[_0-9a-zA-Z-]+/(wp-(content|admin|includes).*) $1 [L]
RewriteRule  ^[_0-9a-zA-Z-]+/(.*\.php)$ $1 [L]
RewriteRule . index.php [L]

I have tried with the RewriteBase fr/fci/ without any luck. THANKS!