Is it possible to install Android 3.0 on my Android 2.3.6 Huawei m865c? The title essentially explains my dilemma, but should I be able to, is it possible to install it via my BootLoader?
Android 3.0 (Honeycomb) is supposed to be a tablet-exclusive OS, and it's already deprecated. It's replaced by Android 4.0 (Ice Cream Sandwich) which unites the OS both for phones and tablets.

As for official OTA, I couldn't find any information about that, so it seems that Android 2.3.6 (Gingerbread) is the latest official Android version available for the phone.

The only way to update your phone (unofficially) is to flash with custom ROM/ported stock ROM, which I find it hard to search, if available. ClockworkMod site lists 1 custom ROM, A2Tude, but it seems that it's just a custom ROM based on Android 2.3.6, so I couldn't find any ROM with Android version higher than that.