well since i assume you're on the latest firmware anyway.. you are going to need a hardware flasher to bring it back down to 3.55.. i personally own an E3, i've also heard good about progskeet and teensy but i believe those require soldering.
in addition to this. there is a way to play online as well as mod.
when you use a flasher you have to have a docking station for the HDD.. and you can get a dual docking station to hold 2 drives. the E3 supports dual boot on a PS3 enabling to use one PS3 for 2 purposes with just flipping a switch. one hard drive for for mods and the other to keep you playing online.
although i know about the dual boot i have no experience with it. info on the process is a must before you attempt it. hope i helped.
and yes playing online with a modded system WILL get the console banned.