Photos - Greyed Out After Yosemite Iphoto Upgrade


This just happened to me. I was going crazy trying to figure out why only PHOTO BOOTH is showing up now in both POWERPOINT and WORD. I have been using Word since 1998 and know the way to insert photos into a word or powerpoint doc via insert, from file, etc. Now, after about an hour, and lots of spinning and freezing, crashing and spinning, I finally discovered the PHOTOS is greyed out. I have Yosemite, so remember, Apple upgraded my photo account recently from iPHOTO to PHOTOS. I do not have my photos saved in the cloud either. I did find the workaround by going to my HD>Pictures and can also drag to the desktop then insert. Also, under the sidebar "MEDIA" I can insert a song, or a movie clip, but PHOTOS LIBRARY is Grey.
I'm using Office Mac: 2008. So, what has happened? I inserted a photo back around March 1st no problem. Of, is there something I've accidentally turned off or on? Thanks in advance. Oh, here's the kicker: Movies show up to be inserted, music clips, but only Photo Booth, no photo library, either PHOTOS or iPHOTO both grey. And there are photos accessible pre-2015.