Hi,problem can be solved .Please check out this link for the Ink System Failure problem.
These are from the link above:
Reset the system by holding down the OK, Cancel, Black, and Color buttons down at the same time and turn the 3310 off. Keep holding the buttons down until the printer shuts off and then turn it back on. You will have to turn the printer off twice and then it will recalibrate.
Our HP 3310 was having the same ink system failure. Tried everything I could find, and had just about given up when I found this forum. I didn't quite get the reset right the first time, but on the second try it worked. After holding down OK, Cancel, Black and Color buttons while turning it off, I turned it back on, it turned itself off and I turned it back on again, it started off doing the calibration and it took about 5 minutes, but when it was finished I had a working printer again.
*** Fix your HP Photosmart D7360 (Reset Code/Master Reset) ***
1- Turn off power and unplug from power source.
2- Open right side of printer (looking at the front).
3- Disconnect,by pulling gently, both white flat ribbon cables off the main circuit board.
4- Plug in power source and turn printer on. Wait till you get a error message and push "Ok".
5- Unplug power source.
6- Reconnect the flat ribbon cables by aligning and carefully pushing into the conectors on the main circuit board.
7- Plug in power source and turn printer on (Printer preparing occurred).
8- voila, the nasty error message 0xc18a0001 "Ink System has Failed" is now gone.
Hope this works for you. Please let me know.