Here's how I could resolve the camera unavailable problem.
I followed the post from
http://talk.sonymobile.com/t5/Xperia-U/ERROR-camera-not-available-problem-continues-even-after-two/t...
The Xperia support asked to boot in safe mode and see if it worked.
No one replied saying they booted in safe mode or posted any results. I thought, I might as well try, its still better than a complete repair install of the firmware
I was able to boot in safe mode. The way to do it is:
1. Switch off the phone.
2. Reboot it and keep pressing the "Menu" touchkey. It reponded when "Xperia" was being displayed at the startup.
3. Done, it booted in safe mode.
4. Try the camera functions. Mine worked in safe mode
I then booted back in normal mode after a power off and on. The camera worked in normal mode as well but kept saying "Could not save". It was taking a long time to save an image or a video. But it was able to save after sometime, about 40-50 secs ( its generally immediate). It seems competely normal now.
The camera issue happens again and again. Previously, I used the software repair option where is wipes out everything and reinstalls. Not the best solution offered by sony to resolve problems. They need to provide one more update to the xperia U to fix its various teething repetitive problems before dumping it for new models.
