hmm, interesting. You've turned your mac off since attempting this, right? Just that sometimes niggly little problems may sort themselves out that way.
Also, was photoshop 5.5 available for OS X? Do you open it in OS X or classic? I used it years ago for OS9. Photoshop 7 was the latest I personally used on OS X. I don't think that would be a problem, since an app is an app really.
I can't think what else it could be.
One more thing (not related to your problem, sorry) but what are the dimensions of that image? Seems strange to have an 892kb image, with dimensions that appear so small. I'm just curious.
Back to the problem. If it doesn't work after restart, possibly the only other thing to do is drag each image onto the photoshop dock icon.
Actually, you may be able to come up with something in Automator, or use a script. I don't use those things myself, so can't say if it will save time opening each image (if you have to open automator first or not) but that's something that could work. And although I don't use it much, Quicksilver (free download) may be another alternative.