The most common reason is that you have a volume named "Applications" can you give me all the names of your drives? Try renaming them?
Thank you very much for your reply.
I have used Photoshop for 22 yrs. and this has never happened.
I don't have any volumes named "Applications", but I have a folder named that.
My drive names are JKB'S EXTERNAL/LaCie (external boot), JKB'S G5 (internal drive), EXTRA SPACE/LaCie, Snow Leopard/LaCie, and Hyper Drive.
When I boot up on JKB'S G5 with CS4 the Photomerge it works with no warning, but this drive is a lot slower than my boot JKB'S EXTERNAL/LaCie.
When I boot up with JKB'S EXTERNAL/LaCie, CS4 Photomerge doesn't work, but my CS6 Photomerge does work.