Software

PSD Repair Kit that safely repairs damaged Photoshop files and gives you the repaired image in original format along with the repaired layers and the corresponding bitmap file.

-Repairs PSD files developed using any Photoshop color mode
-Repairs corrupt PSB ('large document format') files
-Repairs images with PDD file extension
-Provides bitmap image of repaired Photoshop file
-Supports Adobe Photoshop CS5, CS4, CS3, CS2, CS1

DOWNLOAD SETUP FROM HOMEPAGE : http://www.psd.repair/


SECOND FREE SOLUTION:

Sometimes Photoshop is adding a few bytes in the beginning of the file when the file is saved, and then the same Photoshop is giving an error and complains about that files... All you have to do is to delete that unnecessarily group of bytes.

Assuming that you already know what is a HEX editor and how to use it I'll write here a few steps you can do before opening a "corrupt" PSD file:

1 - Make a back-up (copy) of the file before making any changes.
2 - Open the "corrupted" file in an usual HEX editor (NOT text editor!) and look for such groups of character just in the beginning: 8BPS and after a few bytes 8BIM another group of bytes and again 8BIM.
3 - This succession should be respected strictly: 8BPS ... 8BIM ... 8BIM. These groups should be very close to each other and it's easy to find them.
4 - Delete all bytes before 8BPS group (Shift Delete) and save the file... =)
5 - Open it in Photoshop and Enjoy.

Hope it works for you, for wide info click at:- http://social.technet.microsoft.com/Forums/exchange/en-US/7041fd54-6d06-466d-9bf0-308458606851/how-to-make-photoshop-file-recovery?forum=w7itprogeneral

See this post, very useful: http://hardcorerikki.deviantart.com/journal/Saving-your-corrupt-PSD-files-and-job-214157171

You'll be using Fireworks to open, and re-save the Photoshop file. This will fix most corruptions.

1. Open the corrupt Photoshop file in Fireworks.
2. Use Fireworks to save it as a .psd Photoshop file. (Important: Do Not save it as a Fireworks file or another extension, because Photoshop may not recognize the layers, or you could lose data.)
3. Remember to give your file a different name when saving, so you won't overwrite your original. (A good idea would be to create a backup of your original before trying this procedure.)
4. Open your newly created file in Photoshop.
5. Remember that many effects will not show in Fireworks, but should show up in the Photoshop layers.