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SamuelRSmith said:
Well, you don't have to lose anything, as you can take the HDD out.

As for your disc, if you send the unit back to Sony, they will return it (same thing happened with me and Burnout: Paradise) - my repairs were free, as well, even though it was out of warranty, and I have no idea why - ring 'em up, you might get some kind of deal, or something.

Wouldn't you still have to reformat it when putting it back in the system?