Google released an update (5.0.11733.9347) to Google Earth recently, and there have been some reports of images not coming in correctly. The images will show up in the approximate location, but the scale appears to be off.
Until Google gets this sorted out, you can download the last version (5.0.11337.1968) that still imports correctly.
You can check your version of Google Earth by going to the Help Menu, and then selecting About Google Earth.
I will keep you posted, as I hear more.
[edit: The original link did not have the download anymore, so I removed it. However, a quick google search should provide you with the previous version]