@Mirson, yea Sony erases them. Before I chose another method to get my repair I called sony and talked to a CS rep for a good amount of time about it. She pretty much guaranteed me my HDD would be erased, regardless of whether or not the HDD had anything to do with the problem. I even told her at one point "it sounds like the techs erase them out of spite". She couldnt give me a real explanation as to why they do this, but for some retarded reason its a common practice for them.

Is it really so hopeless? is selling it the only way?

I am so glad nothing like this has happened to me.

Mine just get stolen instead.

Hey i would rather it break

I gave you a possible solution in my first post, its not hopeless. But you do have to read your own thread to get answers lol

I read your post, i dont trust 3rd parties...

Actually, you can download them as much as you want. It's just that you can only have YOUR ACCOUNT activated on up to 5 different PS3's.

@Seraphic

I would simply get a Slim, but it's totally up to you. If it was a BD Drive issue, I would send it in but as for YLOD I'd have the nagging feeling it's just gonna break on me again... 

You can try fixing it yourself. There are some YLOD fix videos on youtube.

I wouls just send it in to be fixed. There is a chance that you will get your gamesaves back. I did with my original 60GB

You dont want to send it to sony, you dont trust 3rd parties. I think you have pretty much answered your own question. If you dont want anyone else to fix it, unless your gonna fix it....its toast. Someone will prolly buy it off ebay for parts, thats about your only option.

You can re-download any game you bought as often as you like, but you can only have it on 5 active PS3s at a time (you can activate or deactivate a console on PSN). Since your old PS3 died and you obviously can't deactivate it yourself, you can have it done by Sony (call them); I think all you need is your serial number and maybe your PSN username. In case you decide not to have it repaired you should really do this so the games installed on it won't count towards the limit.

About the HDD: Once a PS3 hdd is installed, it gets locked to the system using a unique encryption. If you remove a hdd from one PS3 and install it in another, you won't be able to access the contents; instead the PS3 will ask you if you want to format it.