New photos added to iPhoto aren't available for creating books
I have always had to place new photos into my project to be able to use them.  Once I do they are listed among the available options in the Keepsakes editing screen.

To do this:


Select photos you want to use.
Drag and drop into your project shown in the left column under "Keepsakes".
Open your project. 


Voilà! They should show up as options for use in your book.