No idea about the file duplication issue, but I think it has been mentioned in this forum.
With regard to editing originals, I've had instances when attempting to check images on very old jobs that have been archived on an external disk where I get a message "File not found". Is this what you are getting?
It even happens when the image in question is in the same folder as the Quark job that has been opened.
In my case I believe it is because there are too many folders between the desktop and the archived file on the external - maybe 15 folders in total, which gives a very long file path and file name. The solution is the same as yours - move the file to the desktop.
Hope this is of some help!
Phil