It could be one of two things, you bend the lens when dropped or the pins in the lens has become loose and are stuck.
You can try:
Taking the battery out for about 5 minutes and putting it back in to reset the camera. Also you can try hold the power button down and the ok or select button to to reset it. Also can hold the power and the menu button to try and force the lens out to dislodge the pins. If not,
The funny the is that I would have you drop it again on a carpet but on the opposite side to see if you can dislodge the pins from being stuck, try and have it land flat on its back from a decent height.
If the lens in bent you will have to bring it to a repair shop to have it fixed but it usually costs as much as a new camera.
Copy and paste this website into your browser for solutions:
http://camerarepair.blogspot.com/2007/12/fixing-lens-error-on-digital-camera.html
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