Hi and welcome to JustAnswer,

Almost always, your described issue with the Canon PowerShot S3 IS indicates that the CCD (charge-couple device) and/or its related electronic circuitry has failed. The CCD is the eye of the camera. This could be confirmed if previously taken digital images still stored in the memory could be viewed in the LCD display but not those recently (when the fault has started).

Unfortunately on CCD failure and if you would take into consideration downtime, cost of repair, parts availability and comparative prices of newer/better models, repairs would often be no longer economically viable; sorry. Still, if the unit is still under some form of extended warranty, then you may want to consult with an authorized Canon Service Center.

Good luck and thank you for asking JustAnswer.