SQL Server 2005

There are many complicated technical explanations solutions & Guides to resolve this.

But if you are like me and just want to solve the problem & move along. This is what you need to do .

1. backup the transaction logs ONLY

2. Backup the database ( Full ) for safety

3. Shrink the database

4. Shrink the files.

Done

Side Note: If you run a maintenance plan regularly to back up the transaction logs & databases you will not have to learn this the hard way  as I did.