I have been struggling for a while now with the communication/integration between Lightroom 5 and Photoshop CC. The first problem is that when I use Edit in Photoshop from Lightroom, Photoshop opens but does not display a file. The other problem is that although smart objects open ok from Lightroom, I get a Photoshop is undefined error when I try to save them.
There’s a lot of discussion in the forums about these errors and some things work for some but not others. What has worked for me though is the approach described here.
It would seem that if you have a drive called Library (in my case used as a document store) then Photoshop or Lightroom somehow confuse this with the OSX system Library folder. If you rename your disk drive to something else (I chose File Library) and reboot your machine then the integration starts working again.
Hopefully this will help you if you have the same variant of the issue as me. By the way, if you look at the link above, the error was reported for Mavericks. I have Yosemite, so this fix seems not to be tied to a precise version of OSX.