I managed to figure it out.
For anyone else looking to fix this in an elegant way. If your file gets stuck in the virus chest.
The virus chest seems to basically be an XML file where the binary is stored in text xml format under
C:\ProgramData\AVAST Software\Avast\chest\index.xmlYou can open this file and see the entries of all the files added to the virus chest. Sometimes as with mine it gets for some reason stuck there and you will be unable to remove it using the interface.
So what you need to do is remove the entry associated with your particular file from the index.xml.
The index.xml being an Avast system file will be protected by the Avast Self Protection mechanism.
This in turn can be disabled temporarily to allow you to edit the file by going to
MENU->Settings->Troubleshooting -> Enable Self-Defense [Turning off the Avast protections only won't unlock the index.xml
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Turning this option off puts your Avast at risk of tampering so be sure you know what you are doing before turning it off. Then again what we're trying to do is tampering with the Avast files to fix a stuck entry so.Once it's off open a text editor as admin, either Notepad or Notepad++ if you want something fancy.
Edit out the whole XML block out not just the Binary part. Save the file. Restart the Self-Defence, Turn on all Protections back on.No Reinstall/Repairs or Restarts required.
Simple, elegant, tailored to the use case!