Well, I just took 10 minutes to write an ad-hoc parser that will probably fix the bug (it works around the tricky test cases in the thread)[1]. I don't really understand why they want to move stuff onto the server-side, there may be some other trickery I'm missing.
Please feel free to use as-is and integrate it into mysqldump. I can't be bothered to create an account on bugs.mysql.com.
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[1] http://pastie.org/8092330 (EDIT: The parser wasn't fully correct, use [2])