Firstly I have to thank click who pointed me in the right direction, videos and required items.
Secondly I would like to thank myself for taking the courage to try it. Taking apart your beloved PS3 and then taking a heat gun to it is not for the faint hearted. If your willing you can resolve your problems for a fraction of the cost and get a personal boost to your ego.
Heat Gun (Bunnings $34.97
Arctic Silver or Heat Sync Compound 25% Silver (Jaycar $6.95
No Clean Flux Pen (Jaycar $11.95
Total: $53.87 + 1hr 30min.
This guy has all the videos you need on fixing a ylod PS3, applying arctic silver and fluxing your chips.
YouTube - gilksy1's Channel
You can dismantle as you play each video 6 in total or watch them all first to get an idea of what you will be doing.
You don't need flux the first time you do it but I guess it would be better.Just make sure you buy the no clean flux and watch gilksy's video for application locations: http://www.youtube.com/user/gilksy1#p/u/7/MZRReDIHTe0
Just be careful not to go to close with the heatgun otherwise you might melt the chips. I had to use speed setting 2 on my Heat Gun and held it around 3 - 4 inches off the board due to the extra fan speed which was tied to the heat produced by the gun. Heat time I used a count of 30 on each location.
Don't forget to allow the cool down period of 20 minutes for each side of the board and try to keep the board an a even flat surface. I put mine on two house bricks turned on their edge.
This is gilksy video on how to apply the Arctic silver http://www.youtube.com/watch?v=LpvhhamGm5w
clicks classic quote:
Like I said before , I have done it 3 times now and each time I am sill amazed that it works. Coming from a pc background I was so scared to take a heatgun to the motherboard but it works.
Please note: This might only be a temporary fix but at least you will recover your disk if stuck in the machine and your save data which can be transfered by data network transfer method to ensure you get protected content as well.
Disk recovery update:
If your PS3 is an original 60GB release you will have to apply the fix to get your disk back unless your willing to strip down the blueray drive to get it.
If your PS3 is a more recent model then holding down the disk eject button and turning on the power will eject the disk before you get the YLOD indicator. (I get the feeling they built this in for this reason)
Hope this semi guide helps anyone else who might be thinking of trying.