What kind of camcorder is your video coming from and how did you get it into your computer?
Which project settings did you select when you strated your Premiere Elements project?
Which method are you using to add the video to your project?
Which files are in your Project folder?
Have you ensured you have the latest version of Quicktime?
1. I'm using a Kodak Playsport (AVCHD Camera)
2. NTSC-AVCHD-AVCHD LITE 720p60
3. File Folder Method and The Flip/AVCHD... Method
4. I deleted most of the files in my projects folder (The clips not the actual project)
5. I believe I have the latest version of Quicktime
Are you absolutely sure they don't already exist? Every time I've seen the message I have found that indeed the picture DOES exist. Try searching for the filename. A good alternative to Windows Search is: Everything Search Engine
Insanity is hereditary, you get it from your children
According to the specs on the Kodak site, this camcorder shoots in MP4, not AVCHD -- which are similar, but not the same.
Many pocket camcorders use proprietary codecs which are not compatible with Premiere Elements. Often, then only real solution is to edit the video with the software that comes with the camcorder. These are point and shoot camcorders, made for shooting video and then uploading it to YouTube. They usually don't shoot production video.
However, it is possible that, if you have the latest version of Quicktime and you've installed the cam's software on your computer (which might install the necessary codecs) you may be able to edit it in Premiere Elements. You'll just have to experiment with some project settings. You'll know you're using the right project settings because, when you add the clips to the timeline, there will not be a red line above them.
But there are no guarantees, unfortunately. For the most part, this video isn't designed for editing with third-party software and it just may not go. Sorry.
CODEC's, though the "building blocks" of AV files, are rather odd things. They provide first, and foremost, a way to Decode the AV material. Then, they often offer a way to Encode to that CODEC, for Exporting/Sharing a file. Last, and least, they allow an NLE (Non Linear Editor) to be able to actually edit that material. Note: some NLE's work with some CODEC's, that other NLE's cannot touch.
If we just pull figures out of the air (seat of the pants experiences), I'd be inclined to think that with a CODEC you would get the following:
Decode for playback only - 99%
Encode for Export/Share - 50% (dependent on the editing program)
Decode for editing - 15% (and highly dependent on the editing program)
This is one reason that users get fooled, when they can play perfectly, an AV file, in say Windows Media Player, but cannot edit that same file. It goes double with some other players, like VLC Player and MediaPlayer Classic HC - both contain many CODEC's in their code, so one usually does not even need the proper CODEC installed. Playback is no guarantee that any NLE can edit that AV file.
For more background on CODEC's, this ARTICLE might be useful.