At this point, there should only be the mysql schema in /var/lib/mysql
6) Restart mysql
This will recreate ibdata1 at 10MB, ib_logfile0 and ib_logfile1 at 1G each
7) Reload SQLData.sql into mysql
ibdata1 will grow but only contain table metadata
Each InnoDB table will exist outside of ibdata1
Suppose you have an InnoDB table named mydb.mytable. If you go into /var/lib/mysql/mydb, you will see two files representing the table
mytable.frm (Storage Engine Header) mytable.ibd (Home of Table Data and Table Indexes for mydb.mytable)
ibdata1 will never contain InnoDB data and Indexes anymore.
With the innodb_file_per_table option in /etc/my.cnf, you can run OPTIMIZE TABLE mydb.mytable and the file /var/lib/mysql/mydb/mytable.ibd will actually shrink.
I have done this many times in my career as a MySQL DBA
In fact, the first time I did this, I collapsed a 50GB ibdata1 file into 500MB.
Give it a try. If you have further questions on this, email me. Trust me. This will work in the short term and over the long haul. !!!