It sounds to me like you have a corrupted FLASH1 drive.
I have a cure all fix for this. It is harsh though.
1. Get
psp filer. Move it to game (or game150) and run it.
2. Press select for the help screen: If everything is in Japanese, please press O to turn it into English. Press Square to save this, then X to exit.
3. Press "Left D Pad + L + R" to enter hacker mode.
4. Press start until the upper left corner says "FLASH1:". It MUST say "FLASH1:".
5. Delete everything inside of flash1. When you exit, just put in new settings.
6. Upgrade to 3.03 OEA.
^_^ There you go!