problem when flattening image

I use my photoshop cs4 mainly for doing digital scrapbooking and lately when I go to flatten my image instead of it showing on the image as background, it now shows background #1# and it will not save as a jpg. image, unless I press Ctrl.Alt.Z once then it shows up properly and I can then save it as a jpg. What the heck is going on?? It never used to do this???:confused:

perhaps colour is set to index

I have problems flattening when its index colour and not RGB or CMYK etc

I have to flattern then convert to Index