What does this error number mean? Your PlayStation 3 console's Blu-Ray Drive was not found or disconnected. It would really be nice if they just flat out said this, instead of giving you a series of numbers, but yes this means there is some kind of issue with how your console is communicating with your Blu-ray drive. So what should you do to repair this issue? Well luckily there are several ways.
1) Call Sony and see if it is still within warranty. If it is, be sure to send it in for repair do not do anything beyond this step if it is.
2) Open your console, and you will see a ribbon cable beneath your power supply that connects to your Blu-ray drive. Checked it for any scrapes or cuts that could be exposing the metal inside. If it is damaged, you might want to order a new one. This ribbon cable will be specific for your model type. For example, here is a CECHK01 or CECHH01 model ribbon cable for sale on ebay. If there is no visible damage to the cable, you can place a wadded up electric tape ball on top of the ribbon cable clip that holds it in place to help keep the contacts touching.
3) If you replaced the ribbon cable and tried pushing the contacts down with some electric tape and you're still not getting past this update error, then the drive just might be damaged all together. If you are using a modded console and are on a custom firmware, you might want to try using the MFW Builder. This will change your CFW (Custom Firmware) to a (Modified Firmware). You can remove the Blu-Ray drive portion of the update PUP file to get around this error number. It worked for me. Of course, you will need to pull out the PS3 hard drive and put it in to your computer to format it to get out of the update loop and boot in to safe mode on your PS3 to give it another PUP update file. I posted about this on PS3Hax and in my case it was from ordering a used PS3 on ebay and it worked fine for several months and had several updates done to it just fine. But then stopped receiving the newer updates so I opened it up and the ribbon cable had a cut in it which made contact with the metal in the case and shorted out the blu-ray drive board. But, since I'm on a CFW I can just load games from the USB HDD, so it's not a problem. Just used MFW Builder to remove the Blu-Ray portion of the PUP and it worked. Good luck!