Using external editor PSE to crop photos for iPhoto

For years I have used PSE (Photoshop Elements) as the external editor in iPhoto (iPhoto 8 - 7.1.5).  Recently I upgraded to a new machine which has iPhoto 11 (9.4.2) installed.  I decided (amongst other things) to crop a photo in PSE using the "No Restriction" option.  When this photo was re-opened in iPhoto, iPhoto rendered it as a "stretched" photo - like it was trying to force it to the original photo ratio.  Obviously all the dimensions looked weird in this "stretched" photo! As an experiment I reverted the cropped photo to "Original" and then performed the exact same crop within iPhoto itself.  No problem. The photo was rendered exactly as you'd expect.  So why does the new iPhoto not seem to handle externally cropped photos properly?  Is there a solution? (other than forking out another 50 quid for the latest version of PSE - which may or may not have the same issue!)
Yes I'm using an old version pf PSE (6 in fact) but everything else (at least everything else that I've tried!) seems to work OK.
Thoughts anyone?

I may be preaching to the choir here but there may be some PSE tips here that might help, particularly regarding PSE's preferences:
Using Photoshop or Photoshop Elements as Your Editor of Choice in iPhoto.
1 - select Photoshop or Photoshop Elememts as your editor of choice in iPhoto's General Preference Section's under the "Edit photo:" menu.
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
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  the Saving File preferences should be configured as shown:
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:
Note:  to switch between iPhoto and PS or PSE as the editor of choice Control (right)-click on the thumbnail and select either Edit in iPhoto or Edit in External Editor from the contextual menu. If you use iPhoto to edit more than PSE re-select iPhoto in the iPhoto General preference pane. Then iPhoto will be the default editor and you can use the contextual menu to select PSE for your editor when desired.
OT

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