Yeah you can truncate that event log to nothing.   It is a good idea to clean it up from time to time.  I generally look at mine one a week or so and then delete everything out of it.

This problem has happene to me before.  I cleaned everything up and the hsoting provider still said I was using a ton of space.   I ran a database shrink through their control panel but that didn't do anything.   I kept deleting things left and right and was finally able to get it down to a level that they would allow. 

A few weeks later I ran out of space again.  I asked them for a backup of my database.   When I got it, it was huge.  I mounted it to my local SQL install and ran a DB shrink on it, and it went from something like 2.1 GB to 12MB. 

Clearly, the DB shrink available through the control panel wasn't working. I asked them to manual run a DB Shrink for me, since I didn't think it was working through the control panel and they did and that fixed everything up.

I tell you this so that you don't get burned after you clean up your DB, because in my experience alot of these hosting tech support people are really quick to charge you extra money without looking at the issue.

Stuart