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I do believe that it is a firmware issue and not a hard drive issue. If it where a true hard drive failure, your hard drive would be completely useless. Since this error only happens at start up i believe this is what happens.
1) PS3 starts-up and displays the "wave" and plays the "music" 2) The hard drive spins and the PS3 firmware is looking for the "files" on the hard drive for start-up 3) If the start-up files are not found in a certain amount of time, this message is displayed.