To reverse this:

Open up Psi, click "View" and make sure that you've enabled/highlighted the options that say:
- Show Offline Contacts
- Show Hidden Contacts
- Show Agents/Transports

Once you've expanded your buddy list and you can see everyone, just right click in the section of the list labeled "Agents/Transports" where you find the server you used to register with Yahoo!, AIM, MSN, or whatever and select "Authorize >" and then select "REMOVE AUTHORIZATION"

Then you can delete the buddy ("agent") from your list and problems are resolved! Good luck, all.