Sorry to hear about these problems! Perhaps installing Managunz as well might help. The following video says that PS1 games are in CUE and BIN format, but PS2, PS3 and PSP games are in ISO format, so I don't know why a bug can affect only PS2 disc backups, which should be ISO, but I'd like to hear more about this issue. I haven't yet played any PS2 games as this requires non standard firmware on my PS3 Fat CECHG03, which I haven't yet installed.
I only bought a PS3 less than two weeks ago, but I'm not getting many replies to my posts on here and one post has been moved to a PS4 forum where I posted before deciding to buy a PS3.
I'm very impressed to read that you've actually managed to replace the BD drive AND the HDD. My HDD is only 40Gb, so it looks like I need to replace it with an SSD, use an SSD externally, or even USB sticks, but I don't understand much about the PS3 yet. I've downloaded some demos from the Playstation Store which won't play. When I try to run them, it just says "Installing..." (again), with estimated times of 30-40 minutes, or longer! I've read that the internal WiFi receiver is very slow, but I haven't tried using an external USB WiFi adapter yet. My 5G WiFi hub only has a USB-C port, so I can't connect using Ethernet.