Well got it fixed! I had to buy a external HDD case (12.00 on Amazon) hook it to my PC download (HP Format Tool) because windows wont recognize the Fat32 Drive and use the HP tool to format the HDD to NTFS. After its done put it back Into the system and then go to PS3 Firmware site and down load the firmware to a USB flash drive or CD-R, if you use a flash drive make sure u format it to fat 32 file system and create a new folder in the drive named PS3 (all capitals). Open the new PS3 folder and inside create a new folder called UPDATE (all capitals again). Move the downloaded firmware file into the UPDATE folder. The file name will always be called PS3UPDAT.PUP. In summary, place the PS3UPDAT.PUP file in the UPDATE folder which is inside the PS3 folder on your flash drive. Now insert flash drive with update on it in your PS3 and start it up. It will still show the error message once it shows up press START AND SELECT at same time it will begin to update the firmware. ( once u see the orange HDD light flashing you know its working) after its done it will install the software. And then the system will be back to when u first purchased it follow all till ur back on the XMB once there go to SYSTEM SETTINGS > Format Tool and choose full format ( depending on size of HDD it will take different times my 120GB took 7 hours.) once its formatted That's it ! Your good to go. Enjoy.
Sony charges 100.00 for this process. Cost me 8 hours and 12.00.
Phillips Head Screwdriver
2.5 HDD external case and USB cord
Cd-r or Flash Drive
HP USB Disk Storage Format Tool
Copy Of Latest Firmware for PS3