Lafiel said:
well, this kind of shit can happen with every hdd sectors(usually with the size of some KBs) on the hdd break all the time and if you're unlucky a sector with important data on it breaks and makes the OS go haywire
I guess in this case the PS3 couldn't boot it's OS properly anymore and hence demanded to reformat the hdd in order to be able to install the OS anew.
You could have tried to connect your PS3s hdd to another PS3(although I heard that every PS3 uses an individual passcode to protect the hdd from being accessed by a different PS3) via usb to try to copy some of the savegames
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I was looking on sony's forums and somebody said that didnt work for them... So i didnt feel like bothering my friends.