Assemble it, put in the hard drive, and when turning it on, enter into safe mode (there are plenty of posts, how to enter safe mode, I won’t write it down). Personally I think, the problem was, that I did not format the disk into “Dynamic disk”.
(operation after initializing the hdd, mentioned above) Whenever I formatted the hdd, the system loop stopped, and safe mode was always accessible.
Be nice if sony bothered to research and include the actual steps required to fix this stuff.
Anyway, I need to find a usb drive to try to load the update onto to see if I can load it there... I'll do a write up soon for the random folks that get this same error and hit this page via google.
The PS3 system did recognize it, and guided me trough options, and asked me, do I really want to update to 3.40 firmware, then I chose YES. Then the system restarted, and began to update again, and again. Any time, when I turned the console on, it started the update automatically.
What DID fix 8002F1F9 error: So I took out the Ps3’s hard drive (hdd) and linked it with the pc via SATA cable. Right click on “My computer” select “manage” , a new window will pop out, there choose “Disk management”. I strongly advise that in this operation use “Gilksy ylod fix” video on you tube, so you can safely disassemble the console. I honestly don’t know, that did this help, but it did not harm the console. As I mentioned, took it apart, cleaned it fully, with alcohol, and cotton.
I've tried pulling out the hard drive and trying to get to safe mode and doing the same and trying to get the update to initialize, but I still get the error code.
And now, I'm in the process of formatting the hard drive to fat32 on my pc and will throw it back in and repeat the safe mode attempts, etc.
Tried it again using 3.40 on usb drive and had to repeat this procedure. Hope this helps any of you without costing you the 6 hours it took me.