I’m just bringing this post closer to the top. The only thing I can think of is checking something within the settings of the Canon scanning software; that might be the source of the bad path to Elements. I don’t have any Canon software installed on either of the computers running OS X, and I can’t remember how it’s set up.
Ken, I have a Canon N670U scanner, which is the series that preceded the LiDE series of scanners. You can try two things:
1. Scan from Photoshop Elements. Start Elements and do a File–>Import and then select ScanGear CS 7.0.1X … This should allow you to scan, but of course you can’t use the scanner buttons or the CanoScan Toolbox.
2. The permanent solution is to open up the CanoScan Toolbox X (in your Applications folder). Then click the Big Blue Button on top the "Scan-1" text. Then under the "Link Scanned image to" section, click the Set… button. Then navigate to /Applications/Adobe Photoshop Elements 2/Contents/MacOS/ and click on "Photoshop ELements 2.0" and click the Open button. What this does is it navigates through the Elements application’s "package" (which is just a folder, really) and selects the OS X version of Elements rather than the Classic version.
That should fix it. Post back if need more help.
Also, did you download the latest drivers from Canon’s website? If you installed from the CD note that you need to use the driver deleter that’s found on the downloads page of the canon site to uninstall your current driver before replacing it.