Instructions
If your camera is still under warranty, the best thing you can do is to take it to the nearest official Canon repair shop and Canon should fix it for free.
If your camera is out of warranty, or if Canon refuses to repair it for free (happens sometimes if for example they suspect the camera has not been treated properly) you can try some of the methods listed here to repair it yourself. These simple methods have helped a lot of people fix their cameras.
Before trying any of the suggestions, make sure your Canon has fresh batteries and it is in recording mode.
1) Remove the batteries from the camera, wait for a couple of minutes, then put them back in and turn the camera on.
2) Try compressed air. With a fine tip blow off gun and dry compressed air (20 lbs) set the tip between the lens turret and the camera body and turn on the air while moving the tip around the lens. It should remove all dust and sand. Turn the camera on and it should function fine.
3) Another method is to tap the padded USB cover part on a hard surface, for example, a desk. It sounds so simple, but very often in works.
4) Try forcing the camera lens:
Turn off the camera. Place it on the back with the lens facing up and take a look at the spacing between the lens and the lens housing. If you notice that the gap is not even all the way around the lens, the problem should be easy to fix. This type of a problem usually occurs if the camera was dropped while the lens was extended.
Simply - VERY GENTLY - press down the lens on the side where the gap is the biggest. You should hear a "click" as it pops back into place. Try powering the camera back on.
If the lens doesn't extend at all or it extends, and then retracts again, do the following. Turn the camera off. Take the camera in one hand and with the other gently take one part of the lens and gently move it round in a circular movement. Do so with both sections of the lens. You will hear a "click" as it pops back in place. Power the camera on.
Another version of this fix would be to pull and twist on the largest ring of the lens while turning the camera on. Listen for a "click". If at first the focus seems to be off, turn the camera on and off and take lots of pictures, close ups and distance. Focus should slowly start improving.
5) If that doesn't work, there is an online guide for dismantling Canon cameras and fixing the E18 error. (NOTE: Try this only if your camera is no longer under warranty!) It is a great guide with pictures and it can be found here.
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