Its the ylod. From my past experience with a 60gb, send it to sony for a fix. Sony charges a flat fee of $150 for the fix. Dont go through any other options except this one. They are a waste of time and money.
Forgot to mention that while looking for valkyria, i did fing hot shots golf: out of bounds for $19. Thought i'd just put it out there. So one would leave empty handed.