Try leaving the console on the main menu for half an hour without a disc in it. If it does the same thing at any point, try unplugging all the controllers and let it sit again. If it continues to do it, the pins that connect the AC board to the motherboard are not making good connection. If it only does it when the controller is connected (or you randomly hear the VMU beep), then one of your controller ports or controllers is not making good contact and is causing a power surge. If it doesn't do it at all, try another retail game and try PSO without any input devices plugged in. This will rule out various hardware issues like bad controllers or bad lasers.