I have a re-occurring problem with Photoshop for iPad on opening cloud documents, as shown in the attached. The yellow band is not in the original photograph, but on an a random basis I seem to get bands of yellow, magenta and/or cyan running horizontally across photos when I download them. The only way past this seems to be to delete and then restore the photo - but given how unreliable the syncing to the cloud is this takes an age, and sometimes I've had to do this six or seven times to get a downloaded copy I can do anything with.
We are working on identifying and fixing this root cause of this issue. Until we can get it resolved there are a couple work arounds you can try.
As you found replacing the layer with the error can be done. You can also try going back to a previously saved version to get a state prior to the issue occurance. To do so, go to assets.adobe.com in your web browser and select Cloud documents in Files section, click on the document with the issue to open, on the right side there is a rewind clock icon, click on that to show the list of previously saved states. You should be able to tap on one to see the image preview and find a unaffected version. I have also found that opening the file in the desktop version of the application and saving a new copy can clear the bad state.