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There was an earlier post that explained the black ribbon between the LCD viewfinder and the body of the camera is split. You would have to buy a new LCD viewfinder for about $90 or send it back to them to fix for around $250. The same thing happened to my camera and I can actually is the split. If you close it down more than half way the picture shows up. I called Panasonic and they said you have to buy the whole LCD, that you can't just buy the ribbon. They don't even have a part number for just the ribbon. Good luck.
This sounds like the CCD sensor is faulty ( this is the device that generates picture in both v-cams and normal digital cameras and sits behind the lens ). Playback is fine but no image ( or very 'noisy' image ) in capture mode.
Easy to repair but one has to put a new CCD block in.
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