I have an 80GB K01 Model, the dash/XMB works, but Netflix, and Downloadable Games/Demos don't seem to be working. Would it have to do anything with the Blu-ray drive not reading disc? Seen a few other post about the same issue, and they seemed to have PS3 consoles with broken Blu-ray drives. Just no clear answer to if that is the issue. If so, that is pretty sad of Sony to not allow Downloaded games to be playable. Is that a means to make people buy a new console?
That would indeed seem strange to not be able to play games off the HD if the Blu-ray is bad. It really sounds more like the HD itself is bad. I believe many of the older fat models have the OS on flash, not the HD. So that would explain being able to get to XMB ok. But maybe the drive is experiencing faults that is causing anything else to not run properly.
I believe you can take the drive out, look at the manufacturer and look for diagnostic tools from the manufacturer site to test the drive connected to your PC.
I've tried to use another drive. The blu-ray is indeed bad though, won't even read DVDs. I'm 100% sure both hard drives were healthy 80GB HDDs. What happens is, when I get go to Netflix or a Demo/Game it will flash black with a green bar on it, then it will go to "No Signal" and after that it swithes back to a black screen. The HDD light blinks a few times in the process. I've formatted both drives, restored file structure, database, PS3, etc. Everything I could think of.
Not Wifi. My TV defaults to a No Signal message whenever it doesn't detect video input. So the PS3 is obviously trying to switch between Video modes or something. Both HDMI and AV do the same exact thing.
Ahhhh. That makes a little more sense. I hate to throw the "catch all" answer out there, but you may be on the verge of YLOD. Sounds graphic card-y from the description you give. You have an 80gig, so I guess that's a fatty (without me looking up the "k" to verify).
I'll point you to maybe google YLOD and look for the article on squidoo--it provides an excellent description. If you haven't replaced your paste at all, you are probably seeing some symptoms of cracked solder.
BTW, if you contact Endless Electronics, they will respond by email and they are pretty quick. They may be able to tell you what is wrong or at least tell you that you need to have it looked at by a professional.