Upon further Reading of The F'ing Manual (c), the environment variable is named LIBGL_DRIVER_DIR, right?: http://dri.sourceforge.net/doc/UserDoc.html
My apologies if I thread-jacked and thanks to those who enlightened me.
Also the original issue was with r500 and is unrelated to yours.
name of display: :0.0
libGL: XF86DRIGetClientDriverName: 4.3.0 r600 (screen 0)
libGL: OpenDriver: trying /usr/lib32/dri//tls/r600_dri.so
libGL: OpenDriver: trying /usr/lib32/dri//r600_dri.so
libGL error: dlopen /usr/lib32/dri//r600_dri.so failed (/usr/lib32/dri//r600_dri.so: cannot open shared object file: No such file or directory)
libGL error: unable to load driver: r600_dri.so
libGL: OpenDriver: trying /usr/lib32/dri//tls/swrast_dri.so
libGL: OpenDriver: trying /usr/lib32/dri//swrast_dri.so
display: :0 screen: 0
direct rendering: Yes