PS Elements saving to iPhoto problem

Help! I am using Photoshop Elements 9 with iPhoto 11 on a Mac (Mountain Lion). My original problem was that any edits I made in PSE elements (using PSE as the edit program for iPhoto) were not reflected in iPhoto. However, after bad instructions from an Apple tech about this problem, I now have an even bigger problem, which I will address here.
I cannot save any edited file from PSE back to its original location in the iPhotos library. The Save location is the last place I visited in the finder. In the past, the file would automatically be saved in the correct location. (Of course recently the edits would not show up in iPhoto, but this is another problem.)
In the past, I could open iPhoto, edit a photo in PSE, save the file, and the edited file would appear like magic in iPhoto. No more.
For what it is worth, the Apple tech had me empty all caches on the computer. For my part, I also reinstalled PSE, but nothing works. For the record, I write over the original file and save as a jpeg.
Help!

I had two problems. First, the edts made in PSE would not show up in iPhoto, even though the paths to the files were correct. Then, the paths to the original file were lost and photos were saved into the Pictures folder.
But there is now good news -- I solved the problem. The problem is Default Folder X 5.5b10 (14688). I turned it off, and suddenly everything worked. The photos update and the saves go to the correct locations.
It finally dawned on me that I had updated the software. I tried turning off Default Folder X, and all was right with the world.
Thank you to everyone for your help and suggestions. I truly appreciate your help and expertise.

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My version is speaking German - so searched for the english manual:
In the Edit workspace, choose Edit > Preferences > Saving Files
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(Reposted from iPhoto for IOS)

Be sure you're following this workflow;
Using Photoshop (or Photoshop Elements) as Your Editor of Choice in iPhoto.
1 - select Photoshop as your editor of choice in iPhoto's General Preference Section's under the "Edit photo:" menu.
Click to view full size
2 - double click on the thumbnail in iPhoto to open it in Photoshop. When you're finished editing click on the Save button. If you immediately get the JPEG Options window make your selection (Baseline standard seems to be the most compatible jpeg format) and click on the OK button. Your done. 3 - however, if you get the navigation window
Click to view full size
that indicates that PS wants to save it as a PS formatted file. You'll need to either select JPEG from the menu and save (top image) or click on the desktop in the Navigation window (bottom image) and save it to the desktop for importing as a new photo.
This method will let iPhoto know that the photo has been editied and will update the thumbnail file to reflect the edit..
NOTE: With Photoshop Elements 9 or 10 the Saving File preferences should be configured as shown:
Click to view full size
I also suggest the Maximize PSD File Compatabilty be set to Always. In PSE’s General preference pane set the Color Picker to Apple as shown:
Click to view full size
NOTE: If you want to use both iPhoto's editing mode and PS without having to go back and forth to the Preference pane, once you've selected PS as your editor of choice, reset the Preferences back to "Open in main window". That will let you either edit in iPhoto (click on the Edit button) or in PS (Control-click on the thumbnail and select "Edit in external editor" in the Contextual menu). This way you get the best of both worlds.
OT

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