Unable to create New Image using Disk Utility
I want to create a password protected disk image where I can store private files. I googled this simple question and found instructions on how to accomplish this using the New Image feature in the Disk Utility tool. I viewed the step-by-step screenshots and found one curious difference. In OS X v10.7.2 one is unable to select the size. I proceeded regardless. I attempted to create a new file, on my desktop, that was compressed format, with 256-bit encryption. The tool asked for my pasword and to give the image a password, then it began to create the image. After over 15 minutes...nothing. I attempted this again using no encryption, and again the same outcome. I've googled this issue, but can't find anything specific to this OS version.
Why can't a create a new image using OS X v10.7.2?
Anyone's help is greatly appreciated.
MacBook Pro, Mac OS X (10.7.2)