Just found another clue!!
When I first start the album viewer, the pics are totally crap. During this time if you try to select an album, there are only 2 choices......All and Camera shots.
But if you wait for 20 seconds or so, the pics will be excellent quality and when you go to select an album you can then also select My Device and Storage Card.
I think the program must be searching and updating the thumbnails, paths, storage card or something and its taking way too long.
Now if only I could fix it.