Automatically expose underlying files in iPhoto
Go to File > Reveal in Finder > Original File.

It will open a new Finder window with some obscure path, but don't worry, you don't really have to deal with that.

Just grab the file, drop it on the file dialog sheet...



and vuala! Your file has been selected. This little trick applies to any file and any native file dialog in OSX.



Quick and easy.

Note: As an extra tip, you can also drag the file directly to any "Choose File" button in Safari. 



So there you go! First show the file, then drag it to the file picker. No temporary folders, moving or even remembering a path involved. Hope it helps!