What is the photo format? What is the computer configuration?
I have been taking RAW with a Sony, making large .jpg files and putting them on the PrE11 timeline for pan and zoom without issue.
I have read that the "engine" in PrE11 can stall if the files are too big, the computer does not have a lot of memory or it is running in a 32 bit mode.
If you provide more information on what you are doing and doing it with, you'll likely get some quality help.
Good chance you have a 32-bit Premiere Elements (on a 32-bit OS). The limit is (I think) 3000x3000 pixels. If the image dimensions are smaller than that, there should be no issues. This limit does not exist on 64-bit versions AFAIK.
And we recommend your photos be no larger than 1000x750 pixels for DVDs and standard defnition TV -- no more than 2000x750 for high-def.
How do you plan to output and share your finished video?
The max pixel x pixel dimensions WAS 4096 x 4096, though with PrE 11, that might have been bumped up.
Now, and with that said, it only takes a very few max pixel x pixel Still Images to bring, even a powerful computer, to a crawl, or a crash.
As an example, I have several very large Projects w/ many thousand Still Images, though all are Scaled to match the Project Frame Size. For a test of something else (Photo Walls), I did a Project with 4000 x 4000 Still Images, and my workstation could handle four of them. With the fifth, I got a hang, or a crash. In that case, I took the Project into Adobe After Effects, and was able to do the work with 25 4000 x 4000 Stills, and had no issues. AE handles such things better, and differently, than either PrE, or PrPro does.
Even though PrPro, as of CS 5, can now handle larger Stills, and can also do a better job of Scaling, if one has the MPE hardware turned ON, with a proper CUDA-capable card, there is still the issue of computer resources, when handling many large Still Images. It is better, than it once was, but with too many, or too many, that are too large, the computer can grind to a halt.