Updating iPhoto Library causes a problem with Final Cut Express

I have a large FCE 3.5.1 project that was begun prior to the Apple OS no longer supporting PPC applications. The FCE project uses photos that are located in an iPhoto 5 file. Everything worked fine through OS 10.6, Snow Leopard.

After upgrading to Mountain Lion, I decided to convert the iPhoto LIbrary to a version that could be opened by Mountain Lion. I used iPhoto 8.1.2, the latest version that I have access to. Of course, the iPhoto file had to be converted and the result was a file wherein all of the content was now within a “package” instead of the previous Finder folder. After launching the FCE project, all of the photos were now offline. I could not even “reconnect” them because FCE apparently cannot see within the iPhoto “package.” Even if it could I probably would not want to try to do so due to the very large number of photos involved.

Is there a simple solution to this problem. If not, I will have to revert to the old iPhoto file and boot into a Snow Leopard volume to continue working on my project.