When a digital camera gets pressure on the lens, while it's extending, a number of things can happen with the tiny gears inside the lens assembly. They can get cracked, jammed, or broken. The following web blog lists things you can try to get it working again:
http://camerarepair.blogspot.com/2007/12/fixing-lens-error-on-digital-camera.html
If none of these suggestions help, the camera will have to be serviced. Get an estimate first, since repair can be expensive.
Good luck, and hope this helps.
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