Just a thought for everyone and more of a question than a suggestion but in this situation would not be worth shrinking the log file with DBCC SHRINKFILE?

I have no idea if this will work when the disk is corrupt but if it does re-arrange the smaller file so it doesnt occupy the corrput sector the db may come back and you may be able to back it up, fix the disk prob as others have outlined and restore it.

As there is only simple recovery, the contents of the log file are of little practical value anyway arent they?