Before installing iPhoto again, make sure you've deleted your iPhoto Preference file. I'm not sure if it gets re-written when you do an update, so if it is messed up before you update, it may still be messed up after you update, even if you've removed iPhoto. A word of caution - you may want to copy it to your desktop, as once you delete it, it may set everything back to its default values - so any thing you have selected in iPhoto Preferences may go away. If you find out later that this wasn't a problem, you can put it back in its place.
After updating iPhoto, launch it by holding down the "option" key, and when prompted, create a new iPhoto Library. If you can successfully do this, the issue may be within your existing library.
With iPhoto running, try going to File>Switch To Library and select your default library. If this works, great. If not, you may need to fix your Library (make sure you have a backup Library before doing this JUST IN CASE!).
Shut down iPhoto, and relaunch, this time holding down both the "option" and "command" keys. A menu will come up - try the first option (Repair Permissions). If that doesn't work, relaunch again holding down the "option" and "command" keys and try "repair database". Again, if that doesn't work, relaunch again and try "rebuild database".
Again, MAKE SURE YOU HAVE A COPY OF YOUR LIBRARY!