Here's what an Apple support person told me to do (she was very quick to respond and extremely polite, so kudos to her and Apple on that. I haven't tried to reinstall iPhoto yet, so not sure if it's a real fix.
My name is Karen and I understand your concern regarding your iPhoto update. Though helping with technical issue is beyond my area of expertise as an iTunes Store advisor, I assure you that I'll address your concern to the best of my ability.
To fix the issue, please try to uninstall the software and re-install for free.
To uninstall apps you purchased from the Mac App Store, hold down an app’s icon in Launchpad until all the icons begin to jiggle. Click an app’s delete button (x) to uninstall the app. If an icon doesn’t have a delete button, that app can’t be uninstalled. For example, apps that come with OS X can’t be uninstalled.
To learn how to redownload apps on the Mac App Store, please refer to the steps in this article:
Mac App Store: Backing up your app purchases
If you continue to have difficulty downloading any applications, please reply to let me know or consult this article:
Troubleshooting the Mac App Store
I hope everything will be fixed. If you need more assistance, please let me know. Thank you for being an iTunes Store customer.
iTunes Store/Mac App Store Customer Support