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So I bought my PS3 and few weeks ago and I've been running into some problems which are really starting to irritate me.

1: Random Shutting off
Sometimes when I'm playing the thing just shuts off and the light turns red and starts blinking. So Far it has happened in Resistance, repeatedly in COD4 (as in, it won't let me go any farther and always shuts off at this exact point).

2. Internet Problems
Ever since I switched the internet to my friend's wireless and tried to switch it back the darn thing won't let me connect to my home wireless. It has been connected successfully to this network in the past before and I have no idea what is going on.

Can anybody help me with this?

I've never experienced any issues like you've stated. Have you done a google search yet?

That's an isolated issue, but that is a sure sign of a defective PS3. Return it and get a new one. The blinking lights is a documented hardware error.

Is it in a well ventilated area? The back gets quite hot and needs breathing room.

Yes it's at least five feet from the wall.

The blinking light is a documented hardware issue? From where?

Edit: I took a look on Google and the Playstation website and it looks like it might be the PS3 overheating on the inside. But I'm not sure if this is the problem because it happens even if I just turned the PS3 on after leaving it off overnight. Regardless I've decided to try and see if that is the reason.  Is there any sort of external cooling device that can be used on the PS3? If so, has anyone used it? How does it work?

I just saw the second problem you were having with getting connect to the internet. If you change your DNS on your modem to a specific number for both the Preferred and alternate and do so on your PS3 your internet problem should be fixed.

Set your Preferred DNS to 208.67.222.222 and your Alternate DNS to 208.67.220.220