Large file won't place as link in Illustrator – "Try Replacing this with another valid link"

[hannad3722757]

I am trying to place a linked file onto my Illustrator artboard and everytime that I try to place it I get the following pop up after it tries to place. I've dragged the file from my desktop onto the page and it allows me to embed the file, but when I try to "unembed" and link the file, I get the same message that "illustrator cannot read the file. Try to replacing this with another valid link"

I have resaved the file as a different color format in PSD to see if that would help, it didn't. I also tried restarting. Uninstalling illustrator and reinstalling it. 

Please let me know if you have any suggestions!

[Jenn5FF3]

I am having this issue in AI 28.1... although I didn't have it a few months ago. When I drag in large billboard-size images onto an artboard (or go File, place) all I get is an empty box. If I open the raster file in AI then I can copy/paste into my layout. However, I often put a gradient mask over the image to fade it into the background and when I try to do that on these large images, only a tiny sliver of the image shows up w/ the gradient, no matter what size mask box I draw. 

[Monika Gause]

There is currently an issue with embedded images and opacity masks.