Try turning the unit off for one minute. Then turn the unit back on and turn the water dial to the left and press the water button until the unit flushes itself. This is the solution customer service gave to me and it worked wonderfully!
Check out chapter 15 of the manual, you can download it from this link.
http://capresso.125west.com/c1000_manual.pdf
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I have to same problem, all it says to do is call them, but I'm not under warranty anymore.
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