I have a Canon PIXMA IP3300 that has a folding down paper output tray like your printer. On the side of the output tray, there is a little button that is automatically pressed by the tray when it is folded up to notify the printer that the tray is closed. Check that this button hasn't remaining pressed in. Take a look at the attached picture, I have circled it in Red.
What a great guy. As I was in a rush I hired a fixer who, after inspection, found the exact same solution. The little plastic spur (don't know what to call it) was broken, there in nothing to push the inside switch. We stuffed the hole with paper, keeping the inside switch on.
Really thank you.
Do yo know where I can get drawings/schematics on this printer?