Did you embed the photo elements in Illustrator or are they just linked? If just linked, that's a problem because you are asking InDesign to find the Illustrator file AND also find illustrator's links, which it can't do. So first option, embed the links into Illustrator.
let's start there. Let us know what happens
Owner/Adobe Certified Instructor
Oak Park, IL
When you place an Illustrator file, you are placing a PDF so linked or unliked in AI is meaningless. The only time that would come into play is if you were packaging the InDesign file.
It might help to see some screenshots. But check to see if the AI link is up to date. If it’s modified or missing that would cause this.
Thank you for your response, I photo elements are embedded in the illustrator file. I am shrinking them down to much smaller then their original size within that file, I don't know if that would have anything to do with it, just thought it might be relevant at some point. When I am viewing the indesign file I have even changed my display performance to high quality to see how it looks at that point on screen and the images are clear but then as soon as I export to an interactive PDF they are this unreadable blur. Why when I export to print does it work but the interactive is struggling?
What are your compression settings when exporting?
I usually would save them as 144 ppi and I have tried all the compression options and nothing seems to work. I wondering what I am missing.
Let’s see some screenshots of:
1. The InDesign file at 100% with high quality display
2. The PDF at 100%
3. The Illustrator file at 100%
Also, please open the Illustrator file in Acrobat (yes, you can do that) and see how it looks there.
It would be great idea to change your image size in Photoashop - if it's possible.
Scaling down decrease numer of pixels and this is reason your image is blurry.
You can also try to improve images quality during PDF export from InDesign - this way i think you export only preview of your scaled picture
There is virtually no difference between scaling down in Photoshop and scaling down in InDesign unless you're outputting to a very high resolution device.
And I have no idea what you're referring to in that last sentence but preview quality in InDesign has nothing to do with output.