Quark 4.x (for Macintosh) has a bug where it gets confused about the paths to images used in a document. The symptom: When updating pictures in "picture usage", you will get the message "file not found", even when you tell it exactly where the picture is.
- If you have any servers mounted on your desktop, put them away, and make sure you're not working on a remote document because that has been known to cause file-path problems with Quark as well.
- If you open a document and it immediately pops up a warning about missing/modified images, do not click the default "update" button. Instead, click "cancel" and once the document has opened, go into "picture usage" and then update the images.
- If all else fails, then the sure cure is to quit and relaunch Quark.
Note: It's also a good idea to regularly rebuild your desktop (hold down the Command and Option keys when restarting your Mac).