ok everyone after quite a bit of trial and error i have a guide for you all so you can play ps2 games from ext hdd on the ps3 but you will need the following:
1. Swap Magic
2. USB Stick
3. Spare USB HDD
4. USB Extention Lead
5. USBAdvance Tutorial File Pack [PAL]
6. Open PS2 Loader 0.8
7. ESR disc patcher GUI v0.24a
start off by extracting the USBAdvance Tutorial File Pack [PAL] and going into the usbadvance folder and copying everything in that folder to a usb stick (fat32) now go on the usb stick and then into SWAPMAGIC and rename SMBOOT0.ELF to SMBOOT0.ELF.1 or delete it if you want then extract the openps2loader zip file and copy the OPNPS2LD.ELF to the SWAPMAGIC folder on your usb stick and rename it to SMBOOT0.ELF and eject your usb stick.
now plug in your usb hdd into the pc and format it to fat32 if its not already and load up ESR Game Patcher and find your ps2 iso and drag it over onto esr and it will say success now load up USBUtil (comes with usbadvance tutorial file pack) and tell it to copy the esr patched ps2 iso to the usb hdd and when that is complete remove the hdd from the pc.
now connect your cobra usb to the usb extention lead and plug it into your ps3's usb slot 2 (if your ps3 is standing up its the top usb slot) and put it out of the way, now place your usb stick into slot 1 and boot up your ps3 and make sure sure you have your ps2 virtual memorycard mounted then insert the swap magic dvd and boot it (the screen will stay black until you switch your pad back on) once at the swap magic screen press UP+R1 and ulaunch should load up goto config and add filemanager to it now load up file manager goto mass you may need to click it then go back and click it again mine came up blank the first time and copy BEDATA-SYSTEM to your ps2 virtual memorycard once you have done that goto mass and goto the SWAPMAGIC folder and launch SMBOOT0.ELF or quit and boot up the swap magic disc again.
once at the swap magic screen press UP+L1 and it should boot into OPL now go into settings and enable usb games (Auto) then go down to ok and click it then goto the usb games list and unplug the usb stick and replace it with your usb hdd and your game(s) should appear on the list and you should be able to boot one up i tested it with soul reaver 2 and it booted the game.
When Will It End..