Hi William,
This can be a bit of a pain to fix. Usually indeed this error is caused by some problem with the lens (e.g. grain of sand stuck in the gears)-in which case only attempt the repair if you are brave and don't mind ruining your camera further. This is definitely fixable, but you'll need good set of screwdrivers, pair of twezers and very very steady hands. Although IMHO lumix cameras are one of the easiest to fix (e.g. unlike some other brands it's virtually impossible to put the lens back together the wrong way), this is still not an easy job.
On one occassion I've seen this error caused by a problem with the flash circuit-the camera couldn't charge the flash for some reason and was giving me "turn on and off" message. I managed to disable the flash from the menu and now the camera is working - no flash though!
You can the above (disable the flash) or reset the camera - you might be lucky!
All the best,
dupalopez, July 2009