They're not blown out, but the first one is very noisy in the background, and the second is noisy in the shadow area in the background, which is surprising since they were taken at ISO 400 and 200 respectively.
I use Photoshop CS2 and have never used Elements so I'm not familiar with the workflow or what differences there might be in the tools, but it looks like you may be overdoing it with the shadow/highlights tool. There are very thick halos around your subjects, and it could also explain the noise.
If it's possible, I'd suggest you shoot in RAW, probably shoot the same that you have been, or maybe at lower ISO levels with exposure compensation set to -2/3 or -1, and use a RAW processor to remove the noise and adjust your contrast and curves.
When using RAW, since no detail is thrown away, shooting at ISO 200 with -1 exposure compensation is pretty much the same as shooting ISO 400 with no compensation, only at 200 there would be less highlight clipping.