What computer operating system are you running Premiere Elements 10 on?
Where are you when you see this hour glass...in Elements Organizer 10? To get the picture, are you right clicking it and selecting Update Thumbnail?
How much RAM do you have installed on your computer and how much is available? How much free hard drive space does your computer have and is it all confined to the Local Disk C, not supplemental drive(s)?
What are the pixel dimensions of the photos involved and how many of them do you have in the Elements Organizer 10 if that is where you are in the program for what you describe. What is the format of these photos, jpg, tif, .psd, other?
Looking forward to your follow up.
Not sure if the following is going to apply to your situation, but thought I would post this Adobe document just in case.
Regarding Elements Organizer and Image Size