Backup/Restore Log File Question
Run this on the production database 

DBCC OPENTRAN(name_of_database) 


There is probably an open transaction that won't allow your logfile (.ldf) to recycle. You can also verify this with 

select log_reuse_wait_desc, * from sys.databases


Once you've killed or stopped the transaction that's preventing your ldf from being reused, you can shrink the log file to a more reasonable size.

USE MYDATABASE
GO

-- get logical name of ldf file
select name, type_desc from sys.databases where type=1


/* checks to see if ldf's vlf (virtual log files) can be marked inactive and reused */

/* this may take a long time depending on the size of your database and the activity*/

CHECKPOINT
CHECKPOINT



/* shrink the log file */
DBCC SHRINKFILE (N'logicalname' , some_reasonable_size_in_mb)


Once you've taken these steps on your production database, you can retry backing up the database for you dev environement. 

Before restoring your backup, you can check how much space it will take up with 

RESTORE FILELISTONLY FROM DISK = 'path\of\backup_file'


Look at the size column which will give you the size of each file being restored in bytes. This way you'll have a better idea of how much space you need before even trying to restore. Prevents unwanted surprises.