Help please!

Not completely new to photoshop but not a pro either. I'm working in cs5 on a mac and suddenly am having issues I've never seen happen before, hoping someone here can help.

This is whats happening... I bring a jpeg into ps on a layer, if I try to paint over it it will not let me. Instead it paints behind the jpeg on that layer. Also happens if I try to create a layer mask and try to paint away art within the mask it will not.

Can anyone tell me whats going on here?