Is this when you use File/Open to open the file? (You don't open .prel files using Add Media.)
What version of Premiere Elements was this project created in? Are you opening it in the same version of the project?
This is when I attempt to open an existing project.
Created in Adobe Premiere Elements 12. Attempting to open in same version.
So are you using File/Open to try to open this .prel or not?
If this is not working, what happens when you try to open one of the Auto-Saves of this project (located in the Auto Save folder, in the same directory as your project file).
Details are important when we're troubleshooting this kind of thing. So please don't neglect to tell me if you've updated your operating system, moved files from another computer, installed another video editor program, etc. Otherwise it's just a shot in the dark.
It would also help to know what operating system you're using and if you've installed the latest version of Quicktime from Apple, per the program's requirements.
I just began having this same problem when I tried to load in a jpeg from my iMac desktop into my Adobe Premiere Elements 15 for an ending on a one hour news feature video. I had no troubles with all the other previous photos tonight. Now this. Things like this just shouldn't happen. I feel like I've stubbed my toe in the dark and fell on my face at a time when I thought I was finishing up after an all day editing session.
Rather than tagging onto a three year old thread, it may be a good idea to start a fresh thread on this one, Gene. A lot can happen in 3 years!
Meantime, make sure, when you do post, you include the measurements of the height and width of your JPEG as Premiere Elements does limit the size of photo you can include in a video project.