CS3 suddenly acting wacky

“the import did not finish because an unknown error”
I have an iMac running Parallels. CS3 is on the Mac side (trial) PhotoShop CS on the XP side. My files (PNG-24) are housed on My Parallels drive.

My bitmaps inside Flash are becoming corrupt and showing that colored static at the bottom 80%. Trying to import new files I get errors. I am getting this error on 3 PNG different files. I converted 1 to a GIF and was able to import that one but that really isn’t adequate since I need true transparency. I also just imported a JPG so this issue appears to be PNG related. This is really getting on my nerves.

Just switched to Flash 8, same error message.