I'm not familiar with that tool, but you can try using this DriveCleanup tool to remove the phantom drive.
It's able to remove virtual drives I've created with Daemon Tools, so it might do the job for you.
DriveCleanup removes all currently non present "Storage Volumes",
"Disk", "CDROM", "Floppy" USB drives and their USB devices from the
device tree. Furthermore it removes orphaned registry items related to
these device types. Since V0.8 it removes WPD devices under Vista and
Started with parameter -T (like test) it shows which devices it would
Started without a parameter, it does its job without further inquiry.
To remove certain types of devices there are the parameters -U -D -C
-F -V -W and -R.
Sample to remove abandoned registry entries only: drivecleanup -R
Under x64 editions of Windows only the included x64 version works
correctly, with the Win32 version you will see "severity error 0x235",
which is ERROR_IN_WOW64.
Admin privileges required.