Thanks Kirby, I actually found those same instructions and run the repair permissions and data base earlier today which seemed to fix the issue of not being able to create new folders or projects. Alas, not even rebuilding the data base located my missing project (containing my wedding picutures!). Ended up restoring the entire library via TM from night prior and exported my missing project as a library and importing back into the original library as I'd made some considerable changes since last night (also run repair once more after the import).
Bottom line everything seems to be working great again, and to answer the OP's question - try repairing the permissions and database as Kirby also said.