HELP! Photoshop file won't save -- "disk error"

I'm a bit worried. I'm running Photoshop CS on my iBook G4 and couldn't save a file to the hard drive. Popup says "can't save file, "disk error"."

File isn't crazy big -- 41.8 MB, just starting a project and doing a routine save. I repaired permissions as a start and still go the same response. Do I need to reboot after repairing? But I'd lose the file......

My temporary work-around solution was to plug in my iPod and use it as an external drive -- file saved perfectly. I then dragged it from the iPod over to my desktop. Cool, no problem, and the file re-opened beautifully. I'm glad I didn't lose the file but something is wrong and I'm worried.... any suggestions? Do I need to reboot after repairing?

Running 10.3.7, 30GB hard drive, 256 ram. Hard drive is pretty full, but 8 GB are still free.
I am using Photoshop Elements with a G4 Powerbook and Mac OS 10.3.9 and after scanning one series of slides (12) into the computer with no problem, on the second round I got the same "can't save file" "disk error" message. There is about 13.8 GB free on the HD, so I don't think it is a full-disk problem.
Also perhaps relatedly, trying to boot up either MS-Word for OSX or Excel for OSX (to make a slide name file), the boot up process took forever (10 minutes or more) and I had to force quit them.
I will try the solution mentioned when I am back at work (delete User/Library/Preferences>, but in case Photoshop Elements is different, maybe there is another solution?
Many thanks!