HELP!! Illustrator CS2 file linking

I'm having an issue with a file. When I try to place an image, the 'Link - Template -Replace' in the dialog box is grayed out. Is this because the document was originally saved with the 'Create PDF Compatible File' checked? If so, is there a way to backtrack so I can placed linked images. They are all being embedded and the file size is huge.

Any help would be greatly appreciated!!

Have you selected the image first before you select the Place command.

If the current image is selected you should get the options to Link and Replace

Having PDF compatible should not affect this, but if there are a lot of images it will slow down the saving process a lot