Direct downloads from camera to PC are heavy on battery capacity. Remove battery and either replace it with a new one or a fully charged one (note that Olympus recommend Lithium or rechargeable LiON batteries). Press the shutter release once to make sure that it is not in sleep mode.
Make sure that the camera is in "Data Transfer" mode.
Now start the PC, plug in the USB cable at the PC end, and then connect the camera to the PC. Use the eject/remove function to disconnect the camera. Now switch the camera to one of the taking modes. Try to zoom the lens. If it is still permanently out then you have a trip to the dealer.
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