did you purchase the system in the US?
if not, you need the regional update.... (i think)
if all else fails:
try formatting the HD, and letting the system software installed on a Flash RAM chip on the motherboard take care of it...
-But, put the HD into a computer and save the files on it (game files/saves) into some USB drives, and format it, then put it into a PS3 and let it take care of the problem...
also, did you try the update again? perhaps the download is corrupted... or the file on sony's side is bad...
while it has been said:
this is what you are trying to do?
my suggestion, hook it up directly to the INTERNET (hard line) and download it..