For others with a similiar problem...

Problems like this can also arise if the hard drive is heavily fragmented.  May have sufficent space - in reality - but not in a large enough continuous chunks.

Also, if photoshop had to be "ended" with the end program screen... might need to do a search for .tmp files and manually delete the photoshop temp files (then empty recycle bin of course) as these have a tendency to remain...

The bit with the external hard drive, don't recomend unless you always use this when running your machine.  As the drive number assigned may change, when it's disconnected, or if another external is also used...

Another thought is increasing the amount of RAM assigned to photoshop is often usefull, unless you do a lot of multitasking...

Some ideas FWIW