Photoshop not giving the option to save as a psd

I am having this problem more and more frequently, where photoshop will not let me save as a psd. I get four options up : Large document format, photoshop raw, tiff and png.

Usually for it to resolve I have to save it as a photoshop raw, quit photoshop and re open it, more often than not, my file then won't open and the work is lost.

On top of this I am also having problems with selecting and moving images, it seems that the whole of photoshop just doesn't want to work, even with cmd+T it won't let me move a image around.

Background history - not a novice on photoshop but wondering if the file is too large for it to save as a normal psd? Shouldn't be an issue as its only 20cmx20cm board with 3-4 artworks on the layers panel....