log_reuse_wait_desc = replication, transaction log won't stop growing

Hello,

We are using MS SQL Server 2005, version 9.00.3042.00.  Our recovery model is set to SIMPLE.  We do two different snapshot publications a day in the middle of the night, and the replication agents stop when they are done, I checked. 

There are no open transactions on the database in question, although there are around 20 on tempdb.  The transactions on tempdb when reading from sys.dm_tran_database_transactions all have:
database_transaction_begin_time = NULL
database_transaction_type = 2  (read-only)
database_transaction_state = 3  (The transaction has been initialized but has not generated any log records.)
database_transaction_status = 0
database_transaction_status2 = 256

This is the result of an OPENTRAN command run on the database in question March 6, 2008 at 1:40 PM.
Oldest active transaction:
    SPID (server process ID): 81
    UID (user ID) : -1
    Name          : INSERT
    LSN           : (999:138204:2)
    Start time    : Mar  6 2008  1:34:47:827PM
    SID           : 0x88d52e4051a71143adee5dc7b6619f8a

Replicated Transaction Information:
        Oldest distributed LSN     : (890:2091888:1)
        Oldest non-distributed LSN : (896:2784855:1)

This is the problem:
The transaction log won't stop growing.  The log_reuse_wait_desc in sys.databases for this database says REPLICATION, but the replication agents are not running.  I know that it worked fine for several days after the replication was set up, when the log_reuse_wait_desc said NOTHING, but I don't know why it changed to REPLICATION.  When I run the shrinkfile command, it runs, but the file size remains the same. 

Everything I've read says that with a simple recovery model the transaction log should essentially take care of itself, or I should be able to shrink it with dbcc shrinkfile, but that's not happening, so what's the next step?

Any help would be appreciated.

Have a good day.
Dale Buchanan