Issues with Time Machine, iPhoto and iPhoto Library after reinstalling Lion

I recently reinstalled Lion on my MacBook due to various application issues and to help clean out 6 years of garbage. I did a Time Machine backup before hand and also copied just about everything over to a 'Reinstall' folder on my external hard drive. Now I've lost iPhoto, which I've noticed from other questions is normal for a Lion reinstall. My problem is that I can't install iPhoto from the app store because I don't have Yosemite, and I can't get Yosemite because my MacBook is early 2008. To top it off, Time Machine can't recognize the 2+ years of backups I have saved and it wants me to assign each file that I try to use a "new alias". And my backups from the past year are showing up pink/purple and shaded out, so I can't even restore to before the reinstall. Additionally, my iPhoto library seems to have vanished with the iPhoto app. Six years of my life in pictures - gone. I've run a file rescue, which seems to have found at least some of my pictures, but I'm confused about how I should proceed. First what the heck is wrong with Time machine (or with my use of it)?!? I have loved the idea of Time Machine since I first decided to buy a Mac - restore your computer to a previous date with a few clicks? Brilliant!! But now that I need it, it seems to be completely useless. Also, If I can find my original (probably Snow Leopard) CDs that came with the MacBook, can I reinstall iPhoto and possibly recover the Library? Does Apple's lack of support for the older MacBooks and upcoming lack of security patches for the older OSs mean it's time to bite the bullet and upgrade? And if I do upgrade to an Air and get iPhoto back or the new Photos app, will my old Library be compatible? If anyone as any insight or advice on these issues, I would be very appreciative!

A little background on my machine and setup: Early 2008 MacBook that was upgraded to Lion in 2012. Last spring I got an Airport and connected my exteral hard drive to it so I could do Time Machine backups over Wifi. Reinstalled Lion in December and just found out that while all of my documents, movies, and other files appear to be safe and sound on the external hard drive, my iPhoto Library only appears to consist of the last upload I completed (around 30-40 photos instead of probably 1000's).