ICloud – 3 referenced files in your library will not upload to iCloud Photo Library error

Couple of thoughts:

1. You're running a Referenced Library (where iPhoto does not copy the files to the Library on import). You're doing this with the Library on one volume and the files on another. In iPhoto 09 and earlier, iPhoto uses a system of aliases to track the location of the files. Aliases are very unreliable across volumes. If the path to these files changes you could find yourself fixing each one... one at a time for the entire library. There are other pitfalls to this set up - https://discussions.apple.com/thread/3062728?tstart=0 for more

2. No. iPhoto will only store the modified images within the Library package. There is no way to change this behaviour. iPhoto will never modify the original file.

3. If you have Aperture then forget about iPhoto. The pitfalls mentioned above simply don't arise as Aperture is designed with Referenced Masters in mind, you can manage and (if need be) relocate referenced masters from within Aperture. Also, Aperture (and iPhoto 11) does not make a Modified version. It does make previews, these will always be stored within the Library package, but with Aperture you can choose not to generate them.

I can only tell you that I have the same problem, but on my iPhone. The only time I get it to work is when I turn iCloud entirely on and off. Yet – after a successful sync with all images and videos everywhere, the sync problem reemerge. Your mileage may vary. Try a complete iCloud off/on (and – I would recommend – a reboot in between) and see what happens.