Hello!

I trust the following helps. I did a quick check on my test instance, and it seems to work fine. First, Let's create a test database:

USE [master]
GO

/****** Object:  Database [TestDB]    Script Date: 05/06/2011 16:45:13 ******/
CREATE DATABASE [TestDB] ON  PRIMARY 
( NAME = N'TestDB', FILENAME = N'E:\SQL Databases\SQLDefault\TestDB.mdf' , SIZE = 3072KB , MAXSIZE = UNLIMITED, FILEGROWTH = 1024KB )
 LOG ON 
( NAME = N'TestDB_log', FILENAME = N'E:\SQL Databases\SQLDefault\TestDB_log.ldf' , SIZE = 1024KB , MAXSIZE = 2048GB , FILEGROWTH = 10%)
GO

I detach the database and then go ahead and delete the log file from the particular location. I can then use the CREATE DATABASE statement with the FOR ATTACHREBUILDLOG parameter to regenerate the log file. Please note that doing so will break your log chain.

USE [master]
GO

/****** Object:  Database [TestDB]    Script Date: 05/06/2011 16:45:13 ******/
CREATE DATABASE [TestDB] ON  PRIMARY 
( NAME = N'TestDB', FILENAME = N'E:\SQL Databases\SQLDefault\TestDB.mdf' , SIZE = 3072KB , MAXSIZE = UNLIMITED, FILEGROWTH = 1024KB )
FOR ATTACH_REBUILD_LOG
GO

Do let me know if it helped you in your scenario or not.

Dhananjay, did the above recommendation of using CREATE DATABASE with ATTACHREBUILDLOG help?