Unable to drag a photo into imovie 08 no photo settings available

Hi - any help appreciated - I'm unable for some reason to drag a photo into my project. It's the first time I've used iMovie 08 but am quite a proficient mac user. Photo Library is visible and I can select photos no problem. The photo settings dialog box doesn't appear and if I drag over to the editing window it doesn't appear (but there is a green plus).
Photos are on an external drive, don;t know if this is anything to do with it.
Thanks in advance
Hayley

My photos are on an external drive too and have no issues. That doesn't rule out the external drive as a problem for you but hopefully confirms for you that you should be able to get it to work.
What happens if you drag the photo or a photo from either your desktop or from the iphoto application itself.
Have you tried closing imovie and re-launching it.

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