I have been able to lasso an area and then apply an opacity change to that area only. Now I can only change opacity of the entire photo even though a specific area has been selected. How do I fix this?
Not sure what mehtod you used to change the opacity, but you should use a layer mask and fill this with the tint of gray equal to the amount you want to fade back opacity.
This will give you better editiabliity, not destroyng the pixel data of the original photograph whcih still exists in the layer. You can then us color correction curves on the mask itself to change only the gray area of the mask if you have revisions to do.
I tried this and it seemed to work.
First make sure you have converted your picture to a PSD.
Then make your selection and Layer-New-layer via copy and this makes a second layer above with just the selection.
Then select the large or original picture. Then CNTL click the second layer with the smaller selection right over the square icon.
This creates a selection in the larger picture and then backspace to create a hole in the larger picture, but with both eyeballs on the picture looks intact. However, select the layer with the selection on it and you can turn down the opacity of that layer.
Save the Psd picture with the two layers and you can always change the opacity again later.
Do me a favor and let me know if that is what you want.