Below you will find a few tutorials, written by the E3 Card Reader team, that provides step-by-step instructions on how to put any PS3 running firmware v3.42 (or higher) into Service/Factory Mode. From there, you can downgrade the PS3 to firmware v3.41 or lower. Of course, we had to fix up the instructions to make it a bit clearer.
E3 Card Downgrade Tutorials for Service/Factory Mode:
1) Plug the E3 Card Reader into your computer. Copy the e3downgrade.bin (download link below) onto E3 Card Reader.
2) Now, plug the E3 Card Reader into the PS3, use the normal jailbreak method (unplug PS3 from power outlet, plug back in, front LED on the PS3 should be red, very quickly press the PS3′s Power button followed by the Eject button), after the PS3 fully boots up, remove E3 Card Reader, and reset system.
3) Next you will enter service/factory mode. Proceed to the next tutorial for downgrading.
The Downgrade Tutorial:
1) Download the file to downgrade to MODIFIED firmware v3.41 (download link below).
2) Using a USB flash drive, copy the two (2) files, modified 3.41 pup and Lv2Diag.self [File 1] onto the USB flash drive. Note: These must be the only files on the USB flash drive and must be placed in the main (root) directory of the USB flash drive.
3) Insert the USB flash drive into the right USB PORT of your PS3 console (It must be placed in the outermost right port) and turn the console on. You will see a black screen but you notice the flashing lights on the console (yellow) and on your USB flash drive.
4) Wait 3 minutes for the system to install the old v3.41 firmware. Towards the end the power button on the console will start flashing green and then your console will power off.
5) Remove the USB flash drive and turn on the console; you will still be in factory service mode. Please verify you have downgraded successfully to firmware v3.41.
6) (Optional) – If you wish to downgrade to any older firmware you can use any regular firmware PUP file now that you are on v3.41. (You do not need to use a modified firmware now that you are on v3.41)
How to Quit Factory Mode Tutorials:
1) Insert USB flash drive back into your computer, remove the firmware PUP and Lv2Diag.self files and copy only LV2Diag.self [File 2] over to the USB flash drive.
2) Power on your console, after 10 seconds and it will power off.
3) Remove any USB device connected to the PS3, turn on your console, and you will be out of service/factory mode and into retail mode with your chosen firmware version installed.