Camera

I have a sony camera model VPC-T700CAT. I have had it for under a year and it was working absolutley great up until this morning. The camera lens won't completley go in when I turn off the camera and when it is on it seems to be extremely out of focus. Its a complete blurr and when you point towards any light it is very sensitive and shows a circular moon shaped path. You can see colour but not shape of the objects through the lens. You can still view pictures , take pictures (very blurry) , take videos (verry blurry but sound is perfect), and the flash and all bottuns work great :). what is wrong :(?