If someone you listed as a friend deletes his/her journal that person will not appear in your friends list but will still be able to read your friends-only posts. If you wish to remove that person from your friends list go to the console and type the following command:
friend remove <username>
filling in the person's username.
Example: friend remove bradfitz
You can list all of your friends, active and deleted by typing the following command at the console - deleted journals will have a D next to the name: