Mysql – ERROR 2013 when connecting to thesql via HAProxy

I am trying to use HAProxy as a load balancer for 2 mysql nodes. I have HAProxy listening on 3307 and it routes requests to the DBs on 3306. When the client is trying to connect to the Proxy (mysql -u … -h .. -P3307 -p…) it gets the following error:

ERROR 2013 (HY000): Lost connection to MySQL server at 'reading initial communication packet', system >error: 0

When the client is trying to connect directly to the DB it works fine. I have no idea why its failing when traffic goes via the Proxy.

Here's what I've already checked:

1. /etc/hosts.allow includes "mysqld: ALL : allow "

2. MySQL config file (my.cnf) doesn't have a bind address line (open to
   all).

I am using HAProxy 1.5dev, Mysql 5.1.x and the whole enchilada is running in ec2 on Amazon linux.

Here's the HAProxy config file:

    global
     log 127.0.0.1   local0
     log 127.0.0.1   local1 notice
     #log loghost    local0 info
     user haproxy
     group haproxy
     maxconn 4096
     daemon
     #debug
     #quiet

    defaults
     log     global
     mode    tcp
     option  tcplog
     option  dontlognull
     retries 3
     option redispatch
     maxconn 4096
     contimeout      5000
     clitimeout      50000
     srvtimeout      50000

    frontend mysql_cluster
     bind 10.0.0.150:3307
     default_backend mysql_cluster

    backend mysql_cluster
     mode tcp
     balance roundrobin
     option tcpka
     option httpchk
     server lb1 10.0.0.140:3306 check port 9200 inter 5s rise 2 fall 2
     server lb2 10.0.0.214:3306 check port 9200 inter 5s rise 2 fall 2 

    listen stats 10.0.0.150:8081
     mode http
     option httpclose
     balance roundrobin
     stats uri /
     stats realm Haproxy\ Statistics
     stats auth ***:***

Has anyone tackled this problem before? Any ideas how to solve this?

Any help much appreciated