Is it possible to work in 16 bit with pse3 using layers, layer adjustment and other tools available in 8 bit pse3?

You are pretty much stuck with 8 bit editing for layers. More complicated work-arounds include moving a layer to a new 16-bit image each time you want to edit. If you make several less severe changes, it is likely that you will never notice the difference. Sacrilege, I know.

Thanks Richard,
Monik