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PS3 red indicator light flashes with yellow means hardware errors and need some maintenance. Do you know, send back to game shop is too expensive and waste your time. Learn the correct repair skills and fix it by yourself is the ultimate method. Here is the repair guide for you to learn : DIY PS3 Repair Guide Not only such yellow light flashing problem, you can repair other red and yellow light related issues as well.After you purchased the product, you will be guided to the step-by-step videos and ebooks for you to work with.
This is known as the yellow light of death.(ylod) It's about 150 bucks to have it serviced unless it's still under warranty.It says in the manual it is an overheating issue. As for your problem, call customer support at 1-800-345-SONY
i have the 60 gig unit and have the same problem. i called sony and they said it has to be returned for repair. it will cost $150 plus tax. they will set up shipping with ups for you. they said 10 to 14 days when the unit arrives at the repair center.