Thanks for trying to help out! The restart didn't change anything, still get the message.
Dragging the "iPhotoLock.data" to the destop didn't work either. Also I noted that it doesn't actually drag out of the folder to the desktop, but gets copied there instead and still remains in the exposed window. My iPhoto Library is in the Pictures folder.
When I used Control Click on iPhotoLock.data and chose "move to trash," it left that folder and iPhoto launched... creating an other iPhotoLock.data file with today's date in the exposed window.
So THANKS VERY MUCH! I think I'm good to go now! Fingers crossed.