What kind of image is it? Did you place the picture (File > Place) or did you copy/paste or drag/drop?
Does it show a link in the Links panel?
Its a CMYK .jpg and I also brought it in as a .psd file. I did File > Place. A link does show up.
Also when placed the images becomes enourmous. (56k in x 37k in) When I shrink it, it stays gray still too.
If the file becomes huge it indicates that you embed the image. Don't do that, link them only.
(56k in x 37k in)
That's probably the problem—ID can't generate the preview at those dimensions. Try resizing it in Photoshop (uncheck Resample) to a more manageable size and resave.
Thanks as this may be the most correct answer. The file when I downloaded it from a stock site said file was only 5.5 wide by like 3 in tall. And in photoshop is was only about 2700 pixels wide. But when I checked image size it said over 1900 inches wide. So I saved down and it worked! Much appreciated everyone!