My ps3 updated to v2.79 from a FNR4 disc, it updated ok but when it installed the game data it stopped at 83%.
Now my ps3 wont read games or dvd's, is this a problem with my ps3 or could the game have caused it?
Unfortunately this is a PS3 hardware problem. This fault is not uncommon with the PS3, it is the Sony version of the "red ring of death".
Normally it occurs exactly as you stated you are playing a game (or loading it) and as it reads from disk the PS3 freezes and hangs. The only way to get it to start again is a reset, but the reset actually kills your PS3.
When the PS3 comes back up it will not read any disc (DVD, blue-ray, cd) EVER AGAIN!!!!!!!!!!
If your PS3 is under warranty call Sony and they will get you to do three tests. 1 - Firmware roll back 2 - Factory Restore 3 - Special hardware reset. Sony tech I spoke with admited 1 out of every 100 are fixed with these.
Once all tests fail they will give you a pre-paid return address and number to use at any post office and then they will send you a pre-repaired unit. Takes about 1-3 weeks to get a replacement unit.
if you're out of warranty they will fix it for $150
If it happens again apparently do not restart the PS3 actually kill the power at the hard switch on the back. This has a 50-50 chance of saving your gear.
Thankfully after I had my first unit replaced like this it has not happened again in 12 months. (now that
said this it will fail tonight 
)
