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same basic thing happened on my 50 in Hitachi plasma...I removed the back cover and found two capacitors on my power supply swelled...and two chips on one display board burned.Hatachi doesnt make the tv anymore and the parts were going to cost me almost what the tv did new...so...I sold it for parts on ebay...check all the boards for tell tale signs of damage...
My guess would be to take it to a local repair shop near you as they may not charge as much. The blinking lights that you are referring to usually mean the power supply has gone bad and power supplies don't run much. This guy thru Ebay has the power supplies for $50 and thats with free shipping. Don't know the guy personally but $50 seems reasonable if you know how to get into your ps3 and take out the old power supply and put the new one in. http://cgi.ebay.com/PLAYSTATION-3-PS3-POWER-SUPPLY-APS-226-OR-ZSSR5391A_W0QQitemZ300319803458QQcmdZViewItemQQptZVideo_Games?hash=item45ec748842&_trksid=p3286.c0.m14&_trkparms=65%3A12|66%3A2|39%3A1|72%3A1234|240%3A1308|301%3A1|293%3A1|294%3A50
Really its up to you. Its not hard taking the ps3 apart. Just taking a few screws out from the bottom and then a few from the top and taking the top cover off and exposing the ps3.
Its possible that the power supply isn't putting out all the voltages required for the ps3 to turn on. Best way to verify it is if you had another known good working power supply to swap it with. If you can swap the power supply and get the ps3 to turn on then you know your power supply is bad. If it still gives you the same problem after swapping then the main board is bad. I believe the ground should show 5 volts. if the 5 volts isn't present then the power supply is definitely bad.
That will be extremely hard to do unless you are a bench tech and know what all the marking mean on every componant and or have a schematic. I haven't heard of anyone finding the infamous part that is burning out in the first gen of Power Supplies yet either. Good luck!!
BUT A NEW POWER SUPPLY OFF OF EBAY !!!!!! IT WILL COST YOU AT MOST 47.98 DO NOT PAY MORE THEN THAT .......!! TRUST ME DO NOT PAY SONY NOTHING 150 DOLLARS IS OUTRAGEOUS WHEN I KNOW FOR A FACT ALL THEY DO IS SWITCH OUT THE POWER SUPPLY UNIT ..THAT IS ALL THEY DO .....!!!!.....I HAD THE SAME PROBLEM ......I WAS PLAYING COD WORLD AT WAR AND THEN OUT OF NOWHERE IT JUST SHUT DOWN COMPLETELY ,..WHEN I TRIED TO TURN IT ON IT SHOWED A GREEN LIGHT FOLLOWED BY AN AMBER LIGHT QUICKLY TURNING TO A FLASHING RED ........I THOUGHT IT WAS AN OVERHEATING ISSUE BUT MY AMBER LIGHT SHOWING INDICATED A HARDWARE ISSUE SO I TOOK A CHANCE AND BOUGHT A POWER SUPPLY UNIT OFF OF EBAY AND RECEIVED IT WITHIN A WEEK .......IT BOOTED UP PERFECTLY FINE TRUST ME ...FOR GET SONY AND TRYING TO DO ALL THAT FANCY TRANSISTOR SWAPPING GEEK TALK BULL......JUST SWAP YOUR POWER SUPPLY UNIT AND THATS IT ...YOUR PS3 IS BACK ONLINE !!!!!!!!!!.....THATS IT BOTTOM LINE !!!!!!.....TAKE MY ADVICE OR LEAVE IT I DON'T CARE BUT I FIGURED I SHARE THIS WITH YOU GUYS SINCE I WENT CRAZY RESEARCHING WHY THIS HAPPENED AND I BASICALLY PUT COMMON SENSE INTO THE EQUATION TOOK A CHANCE AND BAMMMM!!!!! BABY I FIXED IT LOL..LOL...HOW ABOUT THAT ..FOR ALL YOU SO CALLED KNOW IT ALL PEOPLE OUT THER ..LOL..LOL.!!!!!...DAMN GEEKS TURNING THINGS INTO ROCKET SCIENCE ALL THE TIME .....LOL...........EBAY OR ANY OTHER PLACE YOU CAN GET YOUR HANDS ON ONE OK .........THANK ME LATER OK ..LOL.....TAKE CARE ..