I had this problem that I somehow had a ton of random blogs followed but didn't feel like going to 100+ blogs and unfollowing them individually. After a lot of searching I finally came across a very random post that would not intuitively come up via a search engine.
Blogger's help suggests to go here on the main page and select the settings wheel seen here:
http://www.google.com/reader/settings and then the "Subscriptions" tab, then select the blogs and hit "Unsubscribe".
Bam, done. Took way too long for me to find that, which I don't think is my fault (who looks under reader settings when it's through Blogger?).
Also, please fix the "Reading list" error -- it's been like this for months.