FYI, I sold a fixed B/C PS3 with a 3.55CFW on it for £100 (which is around $150).
So the price probably is a little high. AFAIK, there's no way at all to fix the overheating issue in the old consoles. You can minimize it to try and prevent YLOD, but it can't be completely fixed... just like you can't completely fix the 3RROD in a Xenon 360.
You can reball it, throw better cooling in it and hope for the best, but it'll happen one day.
60GB (120GB WD Scorpio Drive) PS3 (CECHA01, NTSC), 3.7OFW
60GB (640GB Samsung Drive) PS3 (CECHC04, PAL), Kmeaw 3.55, Repaired (Dead Laser)
PSP-1003 FAT, CFW5.00 M33-6 & Prometheus v2
X-Box 360 Xenon (JTAG'ed, 500GB HDD)