Have you tried selecting the window area you want to fill and clicking the Browse button on the Adjustments panel?
I can do that, but that basically just "re browses" my hard drive for the files I have already added to the "project assets"
The drag and drop should function where you simply drag an image/video/audio file from the "project assets" to the menu item
I just can't figure out how to get them both on the same screen
I think I know exactly what you are seeking and believe it cannot be done in Premiere Elements 11, 12, and 13 as it can be done in versions earlier than 11 where the Disc Layout and Project Media are viewed side by side.
Premiere Elements 13 uses a Movie Menu customization workspace which is not allowing viewing of Project Assets in the Expert workspace at the same time.