Ok Guys I have the same undefined paper error, these are the steps I have done to pinpoint and fix problem:
the sensor to blame for this error is the one next to the black printhead, to check if the sensor is workink go in diag (power off, press cleaning , menu, and shift at the same time, don't let go and turn machine on)mode and check the sensor, it reads 00fe or something similar, I placed a small stripe of white paper under the sensor, if you move the paper out of the sensor the reading on the LCD will change, if you shine a flash light in to the paper where the sensor is the readings will change, this means the sensor is working, my sensor was working but I still had the undefined paper error, what was causing the error was that I had the top cover open and no print head cover installed plus I was next to a window with the sunlight hiting the machine, I moved the machine to a dark corner, re-atached the printhead cover closed the top cover, and problem was solved.
If you dont have a change in reading on the LCD screen then you have:
a dirty sensor, a faulty conection, or a bad sensor