We had this error - word for word - on a Sony Cybershot about 3 years ago. After a long runaround with Sony, repaired under warranty, then happened again. Another shorter runaround, then repaired under warranty, then happened again. An even shorter runaround, then replaced under warranty, I don't think it's happened since.
When it happened first, we googled the error message, and found it appeared on many makes & models. The quick fix was to slap the camera so that the LCD hit the palm of your hand. Usually by three slaps the lens would retract.
Canons may be different, so I'd verify this, but don't be suprised if someone asks you to smack it against your palm.
Sony service reps actually suggested we continue to do that as a long term solution.