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At this point it sounds like you will need to format the memory card. This will permanently erase all the data from the card and then you will be able to use it again. To format the card: Press the Ok button - right arrow to Mode Menu - down arrow to Card tab - right arrow to card setup - right arrow to format option. You will see format yes or no. Choose Yes and press ok. This will clear the card and it can be used again. Make sure you download all images prior to formatting as once the card is cleared all data is lost.
This function lets you format a card. Formatting prepares cards to receive
data. Before using non-Olympus cards or cards which have been formatted
on a PC, you must format them with this camera.
All data stored on the card, including protected pictures, is erased
when the card is formatted. When formatting a used card, confirm
there are no pictures that you still want to keep on the card.
Page 173 of your advanced user manual explains how to format the memory card and clear all data from it.
Unfortunately this is a repair issue with the camera. You may want to call Olympus Customer Service to discuss their repair policy and procedures. Their telephone number is 800-622-6372 option 2 and then option 3.
The markings on the lens barrel are for macro mode purposes. When the zoom ring is set for 300mm that is the distance you are shooting at. It will zoom the barrel all the way out to 300mm if it needs to to help to obtain focus on the subject.