taken from another forum guys, but it has worked for me
Solution Found:
1) Sign out
2) Hit the sign in button (uncheck sign in automatically if checked)
3) Do you see the "Clear My Account History" under the password field?
4) HIT IT!
That will fix everything. At least it overfixed it for me. In fact, MSN restored my list from what it was like 4 years ago. My list grew from 60 to 180 (I kept my list 'clean').
But the important thing was, people who I deleted before and wouldn't appear deleted, now appear deleted. People who I unblocked now appear unblocked (as opposed to staying frozen on block).
To prevent this problem from happening again, do not use any other program besides the native MSN program. I know it sucks at the moment, but I'm pretty sure Adium is what caused the havoc on my list in the first place. Somewhere along the line, Adium didn't do it's job of properly syncing my MSN list with the Microsoft's servers. This was evident when every time I signed back on to MAC MSN, I'd see old contacts or my nickname name being something old.
Please let me know if this worked for you! One other thing I did before employing this method was to thoroughly delete any trace of MSN on my Mac.
G'luck.