"when I'm in LR and want to pass a photo in PS (Edit in photoshop -- edit as a layer) this feature remains grayed out"
Grey 'Edit-In' menus may be caused by-
1) The photo is 'missing'. Lightroom does not know where the original photo is stored- it has been deleted, renamed, moved, by the OS outside of Lr. Grid view thumbnail is showing a [!] on the border? (or possibly a corrupt file)
2) You are using Smart Previews and the original file is not connected to the computer or available to Lightroom. (eg. external usb drive not connected). Plug in the external drive- check that it is using the same Name/Letter as before. (Also see the link for Missing photos)
3) Lightroom and Photoshop are not linked correctly in Registry/plist. See this link-