If you can't empty the Trash or move a file to the Trash...
Try renaming the file - just use a few random letters. The / or | character might be preventing its deletion.
The folder itself may have inappropriate permissions also.
Wow, took a while...The only thing that actually worked was deleting the file directly through Terminal.
For anyone experiencing similar problems, here's direct link to what worked for me: http://support.apple.com/kb/HT2963
The article helped a lot. Thank you much John