I too had this problem and as I had taken out an extended warranty I called the store I had purchased the camcorder from. I was told that this model JVC had a problem with the lens cap.They sent it off to JVC who fixed it without question
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When you dropped the camera you ended up jamming the iris closed. There may be additional damage within the lens assembly. In order to repair the stuck iris, the optical lens assembly needs to be partially disassembled. This is not a project for the novice. This should be taken to a JVC authorized service center for a repair estimate. The estimate will cost about $50 or so.
This problem is caused by a stuck aperture assembly. The problem has occured on multiple models made by JVC (GR-DF430u, GR-DF450U and GR-DF470U). You have to have some degree of technical aptitude in order to disassemble the unit and access the part causing the problem. The tiny motor that opens the aperture flaps is not able to overcome the sticky oil/grease that JVC unwisely used on this part. Therefore the flaps stay closed, and the camera sees no light when you remove the lens cap. This makes the camera think you haven't removed the lens cap, causing the "lens cap" error.
If you feel like you have the skill and you are careful, you can disassemble the unit and clean the part yourself. It takes longer to take the unit apart and put back together than it does to clean the sticky oil off the part.
If you contact me, I can send you a diagram of where the part is located that you need to access. This is not recommended for amateurs, as you can damage the unit and cause other problems if you aren't somewhat skilled in disassembly of electronics.
I saw something about this on another support board. I think it was on pechorin.com. I can't be sure but it sounded like this is a known issue for JVC and they were extending their service and doing post warrenty fixes....
Might want to check this site and/or contact JVC.