Paul J Griffin posted this solution to the Facebook problem
Just solved it here after an hour+ of experimenting.
• When you get prompted "Do you want to set up iPhoto of post to Facebook?" confirm and it will bring up your regular Facebook home page in a small viewer window.
• Go up to the upper right corner of the Facebook page and log out, then hit the "Close" button at the bottom of the small viewer window.
• You'll probably get the same "Do you want to set up iPhoto to publish to Facebook?" prompt again. This time hit Cancel
• Now try to share your pictures to Facebook again. You'll get the "Do you want to set up iPhoto to publish to Facebook?" message again. Do it and this time hopefully you should get a prompt to login to your Facebook account. Enter your Facebook name and password. This should reset your connection.
• If successful you should get a prompt from Facebook that you can close the page. Close it and fingers crossed, all should work again. That's what worked for me.
Many people have found that this resolves their problems
Of course you always have the alternative of exporting photos to a desktop folder and using a web browser to upload them to facebok if this does not resolve the issue