I just purchased Photoshop Touch and have had the same problem on my tab 7.7. I could not access any photos from the local folder. By unmounting the sd card, removing it and replacing it with a different one all pictures were able to be opened. I did format the card after installing it. Just out of curiosity I put the original card back in and it worked great. It seems like the link between the hardware and the software had to be initialized. Hope this works for others with the problem.