PS3 Freezing, PS3 lag

Model # Cech2001A 120GB Slim - Aprox 3 years old, had only 20 hours of use tops.

Internet Connection: Verizon Fios
Modem: Mi424WR

Issues:

Fate System. Even with all filters, cannot render any mobs to even target with camped fates. Seems anything over 20-30 people renders the fate undoable. Fates that are heavily camped have made my PS3 lose sound, freeze or "lag" tremendously.

The lag I am talking about I experienced doing a levequest with someone else per say. I occurred the lag earlier and the game never caught up, so instead of logging and restarting so I could have sound and functionality back, I tried to see if I could live through it. They start the levequest, and I wont see the banner for another 10 seconds, I wont see mob progression, movements, party member movements or actions. I can cast spells, it will go through the animation, but freeze at the end of the animation so when i walk, I am gliding while still doing the animation. If i call my unicorn mount, I disappear for 20 seconds waiting for it to load. If i call the unicorn mount then dismiss it immediately I will stand there and appear to scratch my butt for 20-30 secs (the animation looks like you are scratching your behind). Only way to solve these issues is to exit game and restart it.

My PS3 has frozen at least twice a day and currently the only way to restart it is to pull the plug in the back, which may corrupt the data. Pushing the button in front and waiting does nothing. It seems very disturbing that these freezes are potentially putting my HDD at risk for bad sectors which will freeze the unit more and more, causing a never ending cycle. Is there no way that a R0 / Dc'ing account can be kicked back to the lobby server or at least back into the login.

Freezes on PS3 occurred at Costa del sol while sitting afk in a beach chair while i went grocery shopping. Froze on coming back from boss CS in Toto-rak while waiting for fight to load. Froze on running to a fate in Couerthas(sp?) with aprox 2-3 people that i could see around me. When running to that fate, it seemed when the mobs, actions of others, and surroundings started to load, and i mean JUST started, it completely froze.