your thinking is incorrect. you cannot shrink the partition to avoid the bad sectors. you can simply do a low level scandisk to have the sectors marked as bad and then they will not be used. and yes you are correct you need to replace the drive. failure is imminent.
there are no partitions or MBR on the drive at all as it is unformated/unpartitioned. i wanted to be able to change the sector allocation to NOT include the damaged sectors. ie resizing the maximum capaicity of the disk (LBA) unformated from 488397168 sectors to say 460397168 sectors. but select the area that is damaged from a power surge as the unusable area.