Only way known to work to fix the problem is to rent\buy the non GOTY version and follow this fix listed on the wiki :
PS3 GotY Vampirism Cure Notes
PlayStation Note PS3 players using the English-language GotY edition of the game currently have no way of curing their vampirism due to the above bug as the Vile Lair and other official plug-ins are not yet available on PSN. The Bloodgrass topic will be absent or greyed-out and Melisande will not accept the Bloodgrass even if the main quest is not completed, unlike what occurs on unpatched PC and XBox360 non-GotY Oblivion. This problem also affects PS3 players who have installed Shivering Isles as an expansion; if you are considering adding the expansion, it would be wise to complete the Vampire Cure quest before installing Shivering Isles. There are only two known workarounds:
* Play using a non-GotY disc: Obtain (e.g., through rental), a non-GotY Oblivion disc and use that to play through the completion of the quest. (If you have downloaded SI as an expansion from the Playstation Network, you can delete the Oblivion game data to "reset" your game to the pre-SI version; after completing these steps you can re-download the expansion from PSN at no cost). The Bloodgrass topic can then be chosen and the player's vampirism can be cured. Steps:
1. Because the player's current save must be saved under a version of Oblivion without the Shivering Isles present, items specific to Shivering Isles may be lost. To prevent the loss of items if the Isles have already been entered, first place all Shivering Isles items into a safe container in Cyrodiil, not in the Isles. However, some key items such as the Key to Mania and the Key to Dimentia cannot be removed from your inventory and you will lose them.
2. Travel to Drakelowe with the required two shoots of Bloodgrass, enter and save. It would be advisable to note which save slot it is, as it may be required to revert to it should something go wrong.
3. Completely exit Oblivion, remove the GotY disc from the PS3, and insert the non-GotY disc.
4. Launch Oblivion and load your current save in Drakelowe.
5. Speak to Melisande and choose the Bloodgrass topic. She should now accept it.
6. Save the game into a new save slot so that if something has gone wrong your previous save is still accessible.
7. Completely exit Oblivion, remove the non-GotY disc from the PS3, and re-insert the GotY disc.
8. Launch Oblivion, load your new save and continue. Retrieving any Shivering Isles items from their safe container at this point to ensure that they are still there would be advisable.
o If your game freezes at step #4 (when you try to load the GotY save using the non-GotY disc), it may help to put all items (not just SI items) from your inventory into a container. If your game still freezes on the load screen, then you will essentially be unable to cure your vampirism with this character.
o Known side effects on Shivering Isles:
+ There will be little or no impact if this is performed before the player has entered the Isles at all so it is preferable to get rid of vampirism as soon as possible if the Isles have not been entered yet.
+ If Shivering Isles quests are active, they may disappear or bugs may occur. Keep your pre-workaround savegame just in case.
+ Although Shivering Isles items may be kept with the workaround of storing them in Cyrodiil, spells, powers and abilities will almost certainly disappear. You will have to purchase any missing spells again. If the Main Quest has been completed, speak with Haskill and the two Greater Powers obtained at quest end should be restored.
+ Shivering Isles items kept in player inventory may not disappear if they have been enchanted by the player.
+ Golden Saint and Dark Seducer guards may lose all of their conversation topics. Their arrest behaviour will still occur normally. If the Main Quest has been completed, the Escorts should still have all of their dialog topics.
+ If the Main Quest has been completed, the ownership of the Duke's/Duchess' Quarters may revert and the player may be trespassing in them. Any items stored in them that were previously player-owned will similarly revert and will be considered stolen.