Lens probably got off its track. you need to take the front case apart and pull out the 3 lugs at the base of the outer lens. YOu should ba able to manage to get the outer lens off, dont worry about breakin git as the stuff is made of heavy plastic. If you get it off, see if the inner barrel rotates smoothly. YOu will be actig on a small motor so youll feel a little resistance, but it should be fairly easy to rotate. Lube the helical tracks with heavy white lithium grease and put the outer lens back on making sure to align the tracks, press the lugs back in and reassemble. worth a shot. I did mine and was successful. See my folder on the C8080 http://picasaweb.google.com/pishta68/8080lens/photo#5199141246863292738
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I have exactly the same problem. I'm sorry to say i don't have a solution. I called Olympus about this and they will repair it for about $300... I paid over $1k for this when i bought it a couple of years ago, mine wasn't dropped, was a great camera until it started acting up....
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