Recently, I purchased a broken PS3 (3rd-gen 80GB) off eBay for $100. The description claimed that it would fail to update, so I e-mailed the seller asking if it actually turned on anymore and she said that it did. Well, I got the PS3 and it was in fairly good condition. It was only missing a hard drive cover, so I re-secured the hard drive and turned the PS3 on to give it a whirl. Like the seller said, it did in fact fail to update, but what I discovered next was really upsetting.
I went into the PS3's recovery mode and attempted to repair the hard drive only to find that it couldn't read the hard drive. Well, no wonder it wasn't starting up- it couldn't find the hard drive. So I took the hard drive out and hooked it up to my desktop via the spare SATA cable I had laying around. The first thing I noticed when taking out the hard drive was that it wasn't in fact the original, it had been replaced (with the same size hard drive). After booting up and doing a little bit of detective work (fdisk -l), I discovered that it had no valid partition table (proprietary PS3 format, thanks Sony), so I went ahead and just re-formatted it (dd is amazing, but I'll cover that later) as FAT32.
After the formatting was done, I stuck the hard drive back in and booted 'er up, to no avail. Updating still failed and this time I got myself stuck in an infinite loop of updates. I went ahead and took her apart to take the battery out while I look into other solutions. In the meantime, I'm still looking around.