Hi Danny,
Here is the interesting discussion here on the same
http://forums.microsoft.com/MSDN/ShowPost.aspx?PostID=2283786&SiteID=1 and http://forums.microsoft.com/MSDN/ShowPost.aspx?PostID=889290&SiteID=1
IMO, you can drop the device and then you can delete the physical t-log files, and, then you have an option to create a new dumpdevice for backup with same or new name.
Hemantgiri S. Goswami | MS SQL Server MVP
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"Humans don't have Caliber to PASS TIME , Time it self Pass or Fail Humans" - by Hemantgiri S. Goswami
http://hemantgirisgoswami.blogspot.com
http://forums.surat-user-group.org/

Disclaimer: This post is provided as is, for the sake of knowledge sharing only.