Most likely it needs to be formatted FAT32 to work with the PS3. To format it FAT32, you will need to do it on a Mac, as PCs cannot format over 32GB in FAT32. Make sure you back up your data before formatting as it will destroy all data. Connect the drive to the Mac, turn it on, then open DiskUtility. You can find this in the Applications>Utilities folder. Then locate your drive on the left side of the window, and choose the drive by clicking on it. Then choose the Partition Tab. Under the volume scheme, change the drop-down menu from Current to 1 partition. Then click on the Options button and choose Master Boot Record (MBR) and click OK. Then under the Format menu, choose MS-DOS, or FAT. Then clcik Apply and OK, and the drive will format FAT32, and you should then be able to use the drive in your PS3. I hope this helps.
I'd take it back right away, sounds like the hard drive is going. There are things you can do to try and fix it, but I'd take it right back and get the seller to fix it. It also could be that the drive has come loose but odds are the hard drive is going. So copy all data that's important to DVD and take it back and have them replace the hard drive.
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