I see that you posted this many months ago, but I wanted to respond just in case you never found a resolution.
You may need to totally purge the calendar data in iCal, but are you using the calendar in Outlook? If so, you may have synching setup between Outlook and iCal. You can shut that off in Outlook preferences. Go to Sync Services. Deselect iCal.
I usually advise people not to over complicate their calendar, email, and contacts setups. It's better to choose either Outlook or go with Apple's apps. Apple Mail is far better at managing large amounts of email than Outlook is, and there's an advantage in not using an all in one type app like Outlook. Some people like having everything in one app though.