Here are some troubleshooting steps that you can try that may correct your problem. If the camera is out of warranty (or repair cost approaches that of the camera), they're worth a try. Some of the later steps do involve some risk to the camera, so carefully weigh your options before deciding to conduct them:
http://camerarepair.blogspot.com/2007/12/fixing-lens-error-on-digital-camera.html
And here's a video summary of the steps:
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