How can I remove a folder that no longer exists from my Finder sidebar in Lion? There is a folder in my favorites in the sidebar of the finder on my Mac. That folder no longer exists, but for some reason it started showing up again as soon as I upgraded to Lion

When I right-click to delete the folder, nothing happens. Normally, for most folders, I see a "Remove from Sidebar" option, but alas, I do not for this folder.

Does anyone know a way to edit this list from the terminal? Has anyone else experienced this problem and found a solution?
I was having the same issue and here's what just worked for me:

Hold command, then drag it off the Favorites bar.  The item will turn into a little "poof" white cloud and when you release, it'll go away! Finally!