I have a sd950 is was having the same problem. I took the camera apart in a final last ditch effort, and noticed a little white gear on the side. Would be right side with the camera pointed toward yourself. I used a small flat screw driver to turn the gear and I could feel the lens very slowly moving back in. I only brought the lens back maybe 3mm put the camera back together enough to put the battery back in and press the power button and the lens finished retracting back in.
So you only need to take the back and front covers off to do this fix which is much easier than what I ended up doing though.
I still have this camera because I have a good underwater case for it that I've used for years and still takes great underwater photos.