After installing PSE 10 on OS X Lion, no longer able to select pictures from iPhoto library

I've downloaded and installed Photoshop Elements 10 on my MacBook Pro, which is running OS X 10.7.4. After installation and importing the photos from iPhoto, I noticed that I am no longer able to select images from my iPhoto library from other applications, such as Facebook, Address Book, etc. (ie; typically in a dialog to select a photo or image, simply browse to iPhoto library to get access to all Events, Albums, Faces, etc.).
This capability now seems to be broken even if I browse to the iPhoto Library using Finder. Showing Package Contents on the iPhoto Library reveals that all the images are there.
Any ideas on how to fix this? Drilling into the file structure of the PE Organizer is painful at best.

You assume too much. I am not mucking around with the iPhoto Library.
Here is an example of my problem:
Open Address Book
Select a Contact
Click Edit
Double Click the Photo icon
A dialog appears for me to "Choose" a photo
Click Choose...
Another dialog appears for me to browse to the photo that I would like to attach to that conract
I select my username under "Favorites", then expand the "Pictures" folder
When I click on iPhoto Library, I am no longer able to expand it and presented with the photos, events, faces, albums within it, but only get an icon for the iPhoto Library instead.
This is part of the way a Mac works, and is now broken. It exhibits this in Address Book and any other program, and it was working fine until I installed PSE 10.

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