It isn't exactly dead, but it is severely messed up. Basically when doing certain things (playing PS3 games and browsing the PS Store) the system doesn't recognize some button presses and does 'recognize' direction inputs that aren't being sent. Curiously, this problem didn't occur in the XMB (thus allowing me to back up the data) or when playing PS2 games.

I went online in search of fixes and learned about a tiny recessed reset button on the back of the controller but neither it nor any of the other solutions worked, so I wound up calling Sony.

The one year warranty on my PS3 ran out two months ago, but the customer service representative put me on hold for a few minutes, then told me I was covered by an extended warranty. So now I'm just waiting for the box Sony is shipping me. Kind of a bummer, but I recently acquired a bunch of time consuming PSP games and I never did polish off the Orange Box X360 so there is a silver lining to the cloud.