Upgraded to iPhoto '11, can't open photos

I decided to update from iPhoto '09 (Part of iLife '09) to '11 the other day. I performed a backup and then purchased the software from the App Store. The install finished with no errors and the updating of the iPhoto Library went fine as well.

When I opened the iPhoto, I wanted to make sure nothing was wrong before importing some new photos. I clicked on Albums and they all showed up; even the preview as you slide over the album worked. I double-clicked an album and saw the thumbnails of all the photos. So far so good.

However, when opening a photo (double-click a thumbnail to open), I am rewarded with a screen of garbled information, including upside-down words and other unusual info. If I close the photo and try another photo, the same thing happens.

I tried 20 or so albums and the exact same thing happens on every photo I try to open.

I searched the web and found a few issues with the update, but none that mentioned anything remotely like this. Most of the issues involved missing albums and/or thumbnails. They suggested rebuilding the thumbnails via a start-up utility.

Since my albums are all there, I don't know that I want to try this.

Here is a screenshot of the album thumbnails prior to attempting to open a photo:

Here is what happens when I open one of the images:

Cool, huh? You will notice that the thumbnails are still displaying properly below the scrambled image. I can click on them, but get an image similar, but not the same, as the first.

Tried contacting Apple Support; they may as well have been robots as the support person never bothered to read the email and sent me instruction on how to resume a failed download...thanks!!!

Anyone with a similar experience is welcome to join in this discussion...especially if you found a solution.

MacBook Pro Late 2008

Mac OS X v10.7.5

Plenty of available disk space (>200 GB)

Plenty of Ram (8GB)

Tried with my normal programs open (MS Office, Calendar, etc. and tried with no other user programs open.