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To fix this, you will need to reinstall iCloud.
First, log off iCloud and then Uninstall it.
Reboot your computer, then before reinstalling iCloud, delete the folder from: /users/'your-user-name'/pictures/iCloud Photos. Create a new folder up one level at: /users/'your-user-name'/iCloud Photos.
Install iCloud again.
Log in to iCloud through the control panel, and set it up again using the new location for the iCloud photos, and Reboot again
Let me know if you would like remote assistance with this.