I have read and know someone that it has happened to, if you send it to SONY you won't get your 60gig back you will get a reco 40gig one.
I think from memory it's about $200-$300 including postage to get it fixed and you only get a 3 month warranty on repairs.
Try and fix it yourself. Your machine doesn't work so you have nothing to lose and everything to gain.
Trust me and A1 it's is dead simple to fix. Just follow A1's thread.