Upgraded to iPhoto '11, can't open photos

I decided to update from iPhoto '09 (Part of iLife '09) to '11 the other day.  I performed a backup and then purchased the software from the App Store.  The install finished with no errors and the updating of the iPhoto Library went fine as well.
When I opened the iPhoto, I wanted to make sure nothing was wrong before importing some new photos.  I clicked on Albums and they all showed up; even the preview as you slide over the album worked.  I double-clicked an album and saw the thumbnails of all the photos.  So far so good.
However, when opening a photo (double-click a thumbnail to open), I am rewarded with a screen of garbled information, including upside-down words and other unusual info.  If I close the photo and try another photo, the same thing happens.
I tried 20 or so albums and the exact same thing happens on every photo I try to open.
I searched the web and found a few issues with the update, but none that mentioned anything remotely like this.  Most of the issues involved missing albums and/or thumbnails.  They suggested rebuilding the thumbnails via a start-up utility.
Since my albums are all there, I don't know that I want to try this. 
Here is a screenshot of the album thumbnails prior to attempting to open a photo:
Here is what happens when I open one of the images:
Cool, huh?  You will notice that the thumbnails are still displaying properly below the scrambled image.  I can click on them, but get an image similar, but not the same, as the first.
Tried contacting Apple Support; they may as well have been robots as the support person never bothered to read the email and sent me instruction on how to resume a failed download...thanks!!!
Anyone with a similar experience is welcome to join in this discussion...especially if you found a solution. 
MacBook Pro Late 2008
Mac OS X v10.7.5
Plenty of available disk space (>200 GB)
Plenty of Ram (8GB)
Tried with my normal programs open (MS Office, Calendar, etc. and tried with no other user programs open.

a couple of notes - nothing happened to your photos - something happened to the display of them which you easily fixed
Neither adobe PSE not iPhoto store your photos - your photos are stored on a disk drive and the finder indexes them - no matter what management program you use your photos are stored the same and the same software is used to keep track of where the file is that holds the photo
The only protection for your files (including your photos) is a good backup - I do three - this is true no matter what photos manager you use
I have not looked at PSE recently (I have PSE 6) but I do not believe it has nearly as strong a photo managent system as iPhoto, does not maintain the original as iPhoto does, does not have lossless editing as iPhoto does and it has no integration into other software on the Mac or to iCloud or PhotoStream
LN

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