@ps3fanatic that is caused by overheating. Start by cleaning the fan etc. Use this guide PlayStation 3 Fan Replacement for that. If that should not resolve the issue then you have a YLOD situation going on.
Here is more information about that. The proper fix for this would most likely be a professional reball with a new IC (unlikely you can find one. Anyhow, the biggest reason for failure to reflow is not enough consistent heat. There is a fine line between reflowing and absolutely melting the solder, so one needs to be aggressive without going over board. If nothing else, get a couple of temperature probes and see what heat you generate. You also need to make sure that you apply the thermal paste properly etc. Follow the guide from here and keep on trying.
Second remember that there can be multiple causes for the YLOD:
Dead/Disconnected BluRay Drive
Cold-Joint between the CPU/RSX/EE(If your console has one)
Failing Power Supply
Overheating
Corrupted NAND Flash, and multiple others. the use of this may work for a short time but the real reason for this is the design of the IC. It is a flip Chip design which has shown multiple failures for the PS3 as well as Xbox360 which uses the same design for their IC. Here is a very "quick and dirty" explanation of what causes most of the RROD. It is not always a failure of the solder balls which connect the Flip Chip BGA package to the motherboard. It does happen and you can see why [ http://www.bunniestudios.com/blog/?p=223|on here] More commonly however is that the failure is due to the chip design itself.
As you can see the "bumps" are what actually connects the die to the substrate to make the chip complete. If these bumps fail, the die does no longer make contact with the substrate and thus no contact with the circuit board. The chip has failed.
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