I have fixed similar problems with various versions of this camera.
Many people in FixYa.com recommend various treatments for this problem. These include gently tapping the camera on a hard surface or tapping it harder on the palm of your hand in order to dislodge any sand or dirt that may be clogging the lens gears.
I first to take the camera back to the shop if it is still under warranty. Second, look at similar morels on FixYa.com to see the other solutions. Search for 'cannon lens error restart' and things of that nature.
Third, if none of these other options work out, then please go to my blog and check out the instruction on how to take apart your camera and fix it for yourself. Here's the link: http://johnsmouth.wordpress.com/2010/12/01/lens-error/
The method is for an older model, but your camera should be similar inside. I've used this method with newer Canon PowerShot Digital Elphs and it also fixed those lens errors.
Good Luck!
SOURCE: the lens does not retract
Lens errors are fairly common. Usually it's sand or grit interfering with the lens extension mechanism. Or the camera's been dropped with the lens extended. Or the camera has been powered on, but the lens had been blocked preventing its extension. Or the battery ran down with the lens extended ...
Here are some things that you can do to try to correct it. They only seem to work for less than 50% of the lens errors, but if the camera is out of warranty, they're worth a try.
SOURCE: My lens is stuck and camera reads "lens
I'm pretty sure you will find that Canon hasn't turned their back on
anything. If your camera is in warranty and it stops working...they will
repair it for free. If your camera is out of warranty they will fix it
for a fee. If you drop or otherwise damage your camera, they will fix it
if it is possible to do, for a fee.I don't know of any manufacturer that will repair a camera that was physically damaged by the user for free.
thanxs
http://camerarepair.blogspot.com/2007/12/fixing-lens-error-on-digital-camera.html
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