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The lens has probably got something in the retraction mechanism that is stopping it retracting. This can be something as simple as sand or grit or as a result of a drop or knock. In most cases the camera will need to be stripped apart to remove the lens assy before it can be repaired. This is best left to a professional camera repair shop.
Try blow compressed air around the lens, this might help if something stuck in the lens causing it not to retract. you can also try other suggestions from the link below. it's not for the same camera but it might help.
sorry to hear you are having this issue. well the problem is your lens.
the len motors have locked up and are stuck the lens needs
replacement. repair run any where from 75.00 and up in most cases.i repair these all of the time.let me know if i can help out any further.
Hey Joy_2008, A lens error usually means something is obstructing the movement of the lens (i.e. sand). You could try blowing compressed air into the side of the lens to try and dislodge whatever is stuck in the lens. You could also try placing the camera on a flat surface with the lens pointed up. While holding the shutter button in turn on the camera. What this sometimes does is force the lens to move before the camera shuts down, and when the lens moves hopefully it will dislodge whatever is stuck. If none of this works I would have the camera looked at by an authorized service technician. I hope this helps! Sincerely, Allan Go Ahead. Use Us.
I have just experienced the same problem with the lens jamming. I bought it for my wife having been impressed with the EX-Z500 my daughter bought. She had the same problem last year and paid for an expensive repair, then I found that her partner's sister had also bought one and.......you've guessed it...the lens jammed on that one too.
So that's another three Casio EX-Z500 digital cameras to add to your list of Casio generic lens jamming problems.
I know this is an old post, but for those who want to fix it themselves: try blowing lots of compressed air around the open lens shutter to clean the mechanism. Or use a hair dryer for a few seconds (don't want to heat up the camera). Also with the lens barrel extended and pointed downward, tap the lens barrel with a pencil while you extend and retract the lens by powering the camera on and off. A grain of sand in the mechanism is usually the culprit, and you want to try to dislodge it.
You can open it up, but only as a very last resort. The above procedures usually work if you try them enough. But for those particularly nasty stuck mechanisms, here's an example repair on a Canon Powershot A400 (do this at your own risk):