I feel such a fool, I've taken a harder look up at the e3 and the Micro SD card was fully attached, you need to slid the connector forward then insert the SD card. The 2nd blue light is reporting that it can't see the SD card. I'm going to try again and i'll let everybody know how I get on.
things seems to be progressing (but not to sure in the right direction)
I have the following kit:
E3 Nor flasher (4 part, not the limited version)
8GB micro SD (Formatted FAT32)
USB HDD (Formatted FAT32)
I followed the this tutorial and all went great (after I realised the Micro SD wasn't in correct).
I did the following:
1. copied the update.bin (regular not dual boot) to the SD card. I have switches 1 & 2 down all the others update. Restarted the PS3. It works ok
2. Copied e3_downgrade.bin to the sd card, I have switch 3 up or others down. I performed the backup this took approx 10mins.
the tutorial says that I need the E3 card reader, which I don't have. Do i need to get one or can I use the equipment I already have.
Thanks in advance