1) Have you tried reseating the hard drive?
2) Stand the ps3 on it's wide base, with the touch sensitive buttons facing you
3) Open the plastic cover on the left face of the machine (the narrow base when the machine is standing vertically)
4) You should see the HDD cradle and a blue screw which holds the HDD in place.
5) Remove the blue screw
6) lift up the metal u shaped tag, so it points towards you
7) Slide the HDD sideways by gripping the tag
8) Reverse the procedure to reseat the HDD.
If you are lucky this might work!
If not you could try replacing the HDD with a new one.
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Your PS3's problems are actually being caused by a connection error between the hard drive and motherboard. Without a correctly working hard drive connection your PS3 is unable to function and goes into shutdown mode, with the flashing red light warning .
I would suggest:
1) With PS3 off
2) Remove drive
3) Turn PS3 on
4) Let it complain about missing drive
5) Turn off PS3
6) Put drive back in
7) Turn on
If it still complains, try safe boot recovery mode again, choosing option 3, then again with option 4 -- If it still doesn't work, it's not looking good, bit hopefully those should sort it unless the drive really is kaput.
You cannot switch a hard drive from an old ps3 and put it into the new one. The new ps3 will know that a new hard drive was inserted and offer to format it.
To get the games off the old hard drive, put it back into the old ps3. Insert a USB flash drive into a USB port on the PS3 and you should be able to copy saved games from the hard drive onto the USB flash drive. You can then plug the USB flash drive into your new ps3 and copy off the saved game info,