Welcome to the forums.
You may wish to check and see if iPhoto is behaving normally after the library move. I don't know of any fundamental reason why an iDVD slideshow couldn't access an iPhoto library on an external drive (as long as iPhoto knows where to find its' photos). I assume the external drive is running and connected when you are attempting the burning process in iDVD.
If iPhoto is working, a workaround is to do the slideshow within iPhoto and then Share/Export the slideshow to a Quicktime movie (which then can be imported into iDVD).
Thanks, John. No problems with iPhoto. iDVD was fine with finding and accepting the photos/video clips. But when I tried to make the disk image, it only got through the first two steps. When I checked the Info window, the "assets/encoding" area was grey. It showed the video clips and knew their source was the external drive.
The only solution seems to be to bring the video clips back onto the Mac HD and do the iDVD from there. I do lose the names I've given the clips, but can rename them once they are back on the HD. I had hoped there was some way to encode right from the external drive.
Further ideas would be appreciated! Thanks again.