Works great until I try to quit the app. Hangs every single time.

Question

Just updated to iLife 09 specifically to take advantage of the new iPhoto features. When I go to quit the app though, a small window drops down saying that it is saving data with a button that gives you the option to finish the save at a later time. Clicking this button will successfully quit the app. If I let the save go through, once the progress bar fills up, it starts blinking and will either 1) crash the app resulting in a message from the OS, or 2) remain on screen until I force quit.
Running the latest version of iPhoto. Has happened ever since the initial iLife 09 install. Any help would be GREATLY appreciated!

Answer 1

Library is in my "Pictures" folder. I never moved it out.
I created a new library as you suggested, entered photos, tagged names, and quit. It quit right away without even stating that it needed to save anything like it does in my main library. The actual message I get when quitting my main Library is this:
"iPhoto is saving critical information for your photo library. This information includes recent changes such as imported photos, album updates, and ratings. If you prefer, you can save this information later."
There is a progress bar underneath, and a button that says "Later". If I click the button, it will quit. If I let it run through the save process, the progress bar fills up and then blinks indicating that the app has locked up. I even let it sit there for hours and it never quit after the progress bar was showing that it should be done.