Same thing happens to me on CM7. I end up having to restart to fix it. I don't really use my camera that much though.

 

i used to have a problem with my camera app on cm7. when i i tried to load the app it said something along the lines of camera can't be found. it happened to me once or twice with cm7. so what i did to fix it was to go to the market and download another camera app and my original camera app started working but i downloaded about 2 different camera app before i notice the official camera app was working. so i don't know if one or the other fixed the actual camera app. the two camera apps i downloaded was nemus and 3d camera.

 

download a camera app from the market in see if it do the same thing