For the error message:
Back Up and try rebuild the library: hold down the command and option (or alt) keys while launching iPhoto. Use the resulting dialogue to rebuild. Choose to Repair Database. If that doesn't help, then try again, this time using Rebuild Database.
If that fails:
Download iPhoto Library Manager and use its rebuild function. (In Library Manager it's the FIle -> Rebuild command)
This will create an entirely new library. It will then copy (or try to) your photos and all the associated metadata and versions to this new Library, and arrange it as close as it can to what you had in the damaged Library. It does this based on information it finds in the iPhoto sharing mechanism - but that means that things not shared won't be there, so no slideshows, books or calendars, for instance - but it should get all your events, albums and keywords, faces and places back.
Because this process creates an entirely new library and leaves your old one untouched, it is non-destructive, and if you're not happy with the results you can simply return to your old one.
If you have Aperture 3.3 or later and iPhoto 9.3 or later you can merge libraries with Aperture.
Otherwise the only way to merge Libraries is with the paid ($20) version of iPhoto Library Manager
Downloaded iPhoto Library Manager as suggested after rebuild thru iPhoto wouldn't work . I can now see all photos using iPLM, but still can't open iPhoto directly. Also won't rebuild thru iPML. Still produces same message "you can't open ... etc" iPLM informs me that i have v 7.1.5 of iPhoto installed. Have tried to download updates (8.0.4 and 8.1) but get "file not recognized" message. Any further suggestions? Have always downloaded all updates to mac software, not sure why iPhoto was left behind.
Give this a try:
Starting over from scratch with new library
Start over with a new library and import the Originals (iPhoto 09 and earlier) or the Masters (iPhoto 11) folder from your original library as follows:
1. Open the library package like this.
2. Launch iPhoto with the Option key held down and, when asked, select the option to create a new library.
3. Drag the subfolders of the Originals (iPhoto 09 and earlier) or the Masters (iPhoto 11) folder from the open iPhoto Library package into the open iPhoto window a few at a time.
This will create a new library with the same Events (but not necessarily the same Event names) as the original library but will not keep the metadata, albums, books slideshows and other projects.
Note: your current library will be left untouched for further attempts at a fix if so desired.
Verify that the 2004 photos are indeed safely imported into the new library and that you're using a "managed" library. Once you do that you can delete the 2004 photos from the Masters folder to free up space. Check twice before deleting to be on the safe side. Like the old carpenter's adage: measure twice, cut once.