John:
Welcome to the Apple Discussions. First run Disk Utility and repair disk permissions. Then manually set the permissions on the iPhoto Library folder as follows:
Setting Permissions for iPhoto Library Folder
1 - Select the iPhoto Library folder and type Command-I.
2 - When the Info window comes up go to the Ownership and Permissions section and make sure You have Read & Write permission and that the Owner and Group have Read & Write also. Others - Read Only.
3 - Then click on the "Apply to enclosed items..." button.
If that doesn't fix the problem delete the three thumbnail data files in your iPhoto Library folder and launch iPhoto.
Finally launch iPhoto with the Command
OptionShift keys depressed and follow the instructions to rebuild the library. That will create a new library folder titled "iPhoto Library_1". If that clears up your issue and all is well then delete the original library folder to free up your HD.
OT