I'm not clear as to what procedure you are following. Can you provide more details as to what you did and what format extension that iMovie isn't recognizing.
Normally to create a time lapse with iMovie 10 you would import the photos that you want at 0.1 duration, separated by, say, 10 frames. Then you export that as a movie and import back in to adjust the speed. It would be nice if iMovie 10 could export a photo sequence of a movie, like iMovie 6 could, but no luck.
I believe that you also can export as a movie a time lapse taken by iPhone, and import the time lapse movie into iMovie.
-- Rich