Well first and foremost, if you have a ton of EventQBad items then you have a larger infrastructure issue than just moving the location. With the partitions being on the same physical drive, you aren't going to gain much by moving them from one to the other ... other than the space gain.
How many clients are in your environment?
Where is the SQL server located? Physical or Virtual?
You can change the EventQueue location by stopping ALL services, even Altiris Support as it will restart any service it finds stopped... Go to this registry key and change the path:
HKLM > Software > Express > Notification Server > EventQueuePath
Change that to whichever location you want to place them and then start the services again...