The hard drive is most likey dead. Luckily Sony made it really easy to replace the internal hard drive. Check out youtube for some good videos on replacing the drive.http://community.us.playstation.com/thread/2296642?start=0&tstart=0
Stick with the 5400rpm laptop drives as the 7200rpm drives may create too much heat.
Where can i find one of these and how much can i expect to pay for it? Is this the most likely culprit? What, in your estimation, are my chances of replacing the hdd with one from the computer store and having the ps3 WORK?