Erasing the Time Capsule is the fastest, easiest and best way to proceed if you are willing to start over with new backups and move forward.
Open Macintosh HD > Applications > Utilities > AirPort Utility
Click the Time Capsule icon, then click Edit in the box that appears next to the Time Capsule
Click the Disks tab at the top of the window
Click Erase Disk
The Quick Erase option will only take minute or two