Lightroom Classic: Lightroom was unable to prepare the selected file

[marskiphoto]

After returning an image from PS to LR and doing some further editing I then want to return to PS but LR just tells me: "Lightroom was unable to prepare the selected file... it will not be opened"
Files from PS are saved as PSD when returning them to LR and if I go in the folder the original and the PSD are both there. What further bothers me is that I can open the PSD  in PS and all the layers are there but for some reason, LR cannot open it.

No files have been moved!

Photos are stored on external HDD 

Also, this happened to me recently and after updating PS and LR to the newest version the problem disappeared. However, now I am running the newest version hence I don't think it is an update problem.

[johnrellis]

In Photoshop, what is the setting of Preferences > File Handling > Maximize PSD and PSB File Compatibility?

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[JP Hess]

You might also consider saving the image as a TIF file in Photoshop.

[marskiphoto]

By default it used to save it as TIFF,

After doing some research I found out that if you do a lot of back and forth between PS and LR it is better to save it as PSD.

After switching to PSD I had no problems for a while, this issue only occurred a month ago.

[marskiphoto]

Yes, as you can see below it is on "Always"