After lurking the forums for weeks looking for tunes/tips, this is the one topic that made me sign up.
I definitely feel for you as I just had the same thing happen to me 2 days ago. I have a launch 60 gb console and its been working fine for 3+ years. It just suddenly stopped working the other day when I was just about to win one of the seasonal events races. After extensive research on how to fix it/salvage the save data, it appears the only way to get your data back is by fixing it yourself. I haven't tried it yet but I'll attempt it over the weekend (heatgun method) with help from various sites/youtube videos. I figure I'm already out a PS3. I don't have much to lose except those save files which would be gone anyway if I bought a new PS3 or sent it in to Sony. After putting in 100+ hours into the game, I don't think I have the heart to restart a new GT5 file if I can't get the save back. Best of luck with yours!
To anybody with the launch consoles, make sure you back up your stuff regularly as it appears that more and more of the older consoles are dropping like flies.