156w ago - Here is a guide I wrote on how to convert your Demo / Kiosk PS3 into a fully functional Retail PlayStation 3 console via JailBreak using PSGrade (or similar) so that so you no longer need to enter PS3 Demo Unlock Codes in.
First, we need to be able to use the jig and to do so, we need the kiosk to not auto start when switch is flipped. You can use the public PSGrade (the only version out there, there is no special kiosk version)
First do the following:
Have a disc in the drive
Turn off the power switch
Turn it back on until you see the Blu-Ray light flash one or two times
Turn it off at the power switch (in the back)
Turn it on again at the power switch (in the back)
Now, when you turn the power switch on, the PS3 will still be in standby mode, so we can act as if we are going to jailbreak the unit. Instead of a PSGroove hex, we're going to use our dongle with the PSGrade hex. Go about the normal procedure for jailbreaking, by pressing eject and power. The console will panic and shut down the first time. When you turn it back on your controller should desync and the resolution will be super low.
The vsh (XMB) for kiosk does not have the red box. However, if you see the console is in low res and controller is not syncing until plugged in, then the unit is in factory mode. Now unplug the JIG and power down the console normally.
Format a thumb drive to fat32 and make sure only lv2diag.self from the lv2diag 1 folder and ps3updat.pup are in the root of the thumb drive. Plug thumb drive into the usb port that is all the way to the right (if the console was laying down horizontally). Now, just push the power button to turn on your PS3.
You are going to see a black screen and your memory card light is gonna flicker for roughly 10 minutes until the process is done. The console will shut down on its own when it finishes, so don't mess with it until it's done.
When the console finishes doing its thing, turn it back on and it will be in red box (service) mode. Now, unplug the thumb drive and delete the 2 files you put in there. Then, put the lv2diag.self from lv2diag 2 folder and then plug it back into the same USB port, that it was in before. Once its plugged in, reboot the console. It will now finalize the install and turn it into a full blown retail. enjoy
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I have not tried the Dev_flash3 fix yet. Not sure where to find it or do it. I tried upgrading to 3.50 and it did not help. I also tried to downgrade to 3.21 then up to 3.41 then to 3.50 as another poster suggested and it did not work. I just tried to do the hddo file replacements that was also suggested and that did not work either.
hmm i wish i could guide you through more thoroughly before you jumped onto the conversion part so hastily. it seems from all the reports blu ray playback only affects 3.50 -> 3.41, whether retail to retail or demo to retail (i guess based on your experience).
for all other people converting, you do not need to be on 3.50 demo to convert to retail. 3.41 demo to 3.41 retail works exactly the same, as well as for any other versions below that.
after a successful conversion (not downgrading), i think from there upgrading to retail 3.50 should not cause any bd playback issues. have you tried dev_flash3 fix ? or did upgrading to 3.50 again fix the issues?
My system was 3.21 demo. I upgraded to 3.41 demo and then to 3.50 demo. From there I was able to JB and downgraded to the Modified 3.41. Then I JB again and went to 3.15 retail then did normal upgrades to 3.41 retail and now am at 3.50 retail.