Inline leaves the "LIBS" command out entirely of its own accord

It's looking to me that it's just standard EU::MM behaviour - and not the responsibility of Inline. EU::MM can't find '-lmpg123' because it's not in any of the places it's looking.
Therefore the '-lmpg123' gets wiped out.

If your perl was configured to include /usr/local/lib in $Config{libpth}, then LIBS => '-lmpg123' should work fine (because EU::MM would then find it).

Another option (if you're using gcc compiler) would be to set the LIBRARY_PATH environment variable to /usr/local/lib. I'm not sure if that works with older versions of EU::MM, but I *think* it works with recent ones.

Cheers,
Rob