OK, I managed to figure out what caused this.
Font Explorer X just released their auto activate plugin (version 3.5.0) for CS5 and CS6 Ai. If installed you won't be able to place PSD files. And files with placed PSD will not display them.
Once I uninstalled the plugin everything worked as it should. You'd think they'd test this stuff better that is a basic functionality.
Yes this has been posted on this forum before, I wish such an issue would be posted at a top of the forum to help users like yourself avoid the worries.
But I am glad you found the problem.
BTW I understand Linotype is looking into the issue which shows they have good intentions.
Hello, same problem here, and it's not only concerning .psd files: no raster image file type whatsoever can be placed in Illustrator 5.1, no .png, no .tif, no .jpeg