when recovering iPhoto library, OS X lion has an error "not enough space in cache" or similar

I have an intel core 2 duo mac late 2007, recently upgraded from snow leopard to Lion 10.7. After a clean install, I tried importing the iPhoto library from the external backup drive that I have, everything seemed fine until the import quit with an error message "could not import iPhoto library due to not enough cache memory" or similar.

The library is 30gb and I have spare space 105gb on my hard drive.

How can I fix this - your help is much appreciated.