iPhoto edit question

I used to be able to edit photos by clicking on the option at the bottom. But lately it says: The document “HPIM3340.JPG” could not be opened. Image Capture cannot open files in the “JPEG image” format.

The window says Image Capture and my printer is noted in the sidebar.

The only way I can edit photos is to right click on it then click on edit and go from there.

But what setting got screwed up that my printer is now somehow affecting how iPhoto works?

And the photos are in JPG not JPEG as the error says. The error message makes no sense saying it's a JPG and then saying it can't open it because it's a JPEG. :rolleyes:

This is iPhoto '09 and OS X 10.6.8

Thanks for your help!
Anna