Not sure if Steve already inspected your database, but this symptom can also mean that (some) columns in your tables have the wrong collation set, most likely a binary collation.
Please use a tool like phpMyAdmin to list the fieldlist of the 'user' table (assuming you are complaining that searching for a user in the member list is case-sensitive) and post a screenshot.
PS If steve helped you in a support ticket, then please PM the ticket-id.
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