I recently slapped a 500 GB HDD in my old fat-body PS3 and it works just fine (powers on, digital content works, etc), but neither PS3 game nor blu-ray's work.
Did I somehow screw something up when I put in the new HDD?
P.S. The system is all up to date and everything.
Probably not. Sounds like your optical drive failed. Either the laser's eye and/or servo (small electric motor). Those components can be replaced but better off replacing the entire drive.