I am wondering what size the element paper you are trying to drag into your layout is? I know when I am working with Lightroom and PSE, they are automatically saved at cm rather than inch...so I have to resize them (until I figure out how to change this)
I am sure someone very familiar with this will provide you some help - you can also try a google search for Photo Elements help...I think there is a site called photo shop village or something like it.
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