I had the same problem... and stumbled upon the solution. You need to find, download, and install the iPhoto 9.1 update. For some reason, "Software Update" does not find it.
http://support.apple.com/kb/DL1322?viewlocale=en_US&locale=en_US
There is also a 9.1.5 update... and maybe others... who knows?
Once this is installed, run "Software Update" and you will be informed magically that there is new software for
iPhoto. Download that (takes about 15 minutes). It will ask you if you want to upgrade your library, warn you
that you can't go back etc. Accept the library upgrade, and in a few minutes iPhoto will work again.
All the stuff about fixing permissions and library manager software etc... sounds like a likely story at best.
My guess is someone forgot to code the 9.1 iPhoto update to work with Software Update, creating months of aggravation. I hope this helps.