As far as your router goes, you dont need to worry about DMZ and port fowarding at your point. Your at the Server Instance Configuration Wizard are you not. That stuff is taken care of localy, not accross the LAN or WAN. If your using windows, go under your control panel to Windows Firewall
In there you need to make sure that one of the programs that is a exception(meaning it has full privilages) is going to be MYSQL. This error has never happend to me just using Windows Firewall so I would assume you may have a 3rd party Firewall on there such as Norton, AVG, McAfee, ect..... These programs have things that will block progams from running even locally if you did not approve them first. If you do have said 3rd party stuff, try disabling the firewall all together and then re run the installation for MYSQL. Uninstall it, and delete everthing in the C:\Program Files\Mysql\ folder and then do your reinstall.
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