PS3 won’t read / recognize any disks after 3.70 firmware upgrade

Well, it can slightly reduce loading time. However, reading from the DVD / blu-ray / HDD is not the only time consumming operation that can happen during those loading screen. In fact, it is generally not the longest operation.

After reading the data from the disc, the game still has to:

• decompress it (data is generally compressed to reduce used space)
• rebuild cross-references (between textures and models, ...)
• ...

Those operations generally take more than half of the loading time. There exists some techniques to reduce this time (streaming, ...) but they may not be applicable to all types of game, and they can be difficult to implement.

Game are allowed to use some space on the HDD as a cache of blu-ray / DVD (both on Xbox and PS3). This is not that much used as installation (either via the Guide on Xbox, or via the game on PS3) is generally a better option (as the cache can be cleared automatically by the system after exiting the game).

On some specific games, loading time can be drastically improved however. Gran Turismo 5 for PS3 loading time can be halved by using a SSD.

This is just a guess, but I would bet that your video card is starting to break. Being that you have the original 60gb and its lasted this long, I wouldn't be surprised at all. My original 60gb broke about 5 months ago, and you have to remember you are treading on new ground because no one has had a ps3 much longer than you, which might explain the fact that there is little info about this problem on the web. Also, it taking 2 hours to start showing blue textures means it could be heat related. What happens when you start up the game when your ps3 has been off for a few hours?