You didn't open your version 8 project in version 9, did you? That can often cause corruption, and I highly recommend against it in my Premiere Elements books.
As for your stills, they should not be larger than 1000x750 pixels in size, as explained in the FAQs to the right of this forum.
For hi-def, these files can be as large as 2000x1500 -- but then I'd recommending rendering your timelien often.
The use of oversized photos is the single most common reason for this program overloading.
Try using 1000x750 pixels JPEGs or PSD files and you should have no problems.
(And sorry, I've no idea why you used to be able to make it work in version 8.)
Do they still work in PE8? If so you could maybe try exporting them from 8 and import to 9.
Insanity is hereditary, you get it from your children
I do not know what the limitations of PrE 9 might be, but the max size for stills was 4096 x 4096 pixels in earlier versions, along with PrPro.
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