photo resized

As a Test:

Hold down the option (or alt) key and launch iPhoto. From the resulting menu select 'Create Library'

Import a few pics into this new, blank library. Is the Problem repeated there?

And the result of the test?

Try the following:

1 - delete the iPhoto preference file, com.apple.iPhoto.plist, that resides in your

User/Home/Library/ Preferences folder.

2 - delete iPhoto's cache file, Cache.db, that is located in your

User/Home/Library/Caches/com.apple.iPhoto folder (Snow Leopard and Earlier).

or with Mt. Lion from the User/Library/Containers/com.apple.iPhoto/
Data/Library/Caches/com.apple.iPhoto folder

3 - launch iPhoto and try again.

NOTE 1: If you're moved your library from its default location in your Home/Pictures folder you will have to point iPhoto to its new location when you next open iPhoto by holding down the Option key when launching iPhoto. You'll also have to reset the iPhoto's various preferences.

NOTE 2: In Lion and Mountain Lion the Library folder is now invisible. To make it permanently visible enter the following in the Terminal application window: chflags nohidden ~/Library and hit the Enter button - 10.7: Un-hide the User Library folder.

OT

Option 1

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:

Option 2

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.

Regards

TD