The masters folder is a folder inside of the iPhoto library that ocntains the original photos esxactly as they were imported - if it can be found then you can create a new iPhoto library from it with the original photos exqctly as they were when you imported them
However as Leonie says it is best to run recovery software on your Mac first since any activity on the Mac may overwrite the photos that are there reducing the number that can be recovered
Try lookin at DropBox from another system or your iPhone and see if there is a Masters folder there and if so how big it is
This is a curious renewal of an old thread, but an opportunity for someone currently having a similar issue to read the software ideas posted here and see if any of them will help. Sometimes, when a camera memory card, or USB thumbdrive, or other data storage device no longer functions, try as you may, it could be time to remember if it had a good replacement warranty. The older integrated circuit flash/thumbdrive and camera memory card technologies can wear out since they write on the same place unless there is a controller circuit to spread the wear around in a way that keeps the memory holding areas evenly used. New kinds of technologies are used in memory cards, chips and USB drives; so it is wise to review what you have, & check into the newer stuff.
For image and data recovery one could try a free-trial-running recovery application that can be used on several kinds of devices...
• PhotoRec - from CGSecurity:
I've been sure to reformat camera memory cards in the camera, since sometimes the results vary if one should try & erase or format some kinds of cards via computer.
And, some errors can be in the memory device's hardware. Some card readers don't like camera cards; when that does happen, until you get a new quality card reader, just attach the camera to the computer (unless its a wireless card.)
Good luck & happy computing!