Error 23 on transaction log backup, full backup works fine
To answer the two specific questions in your post:


  Can I change the database property to simple restore and shrink the log file?


You can switch to the simple recovery model and shrink the log.  This might workaround the problem for a little while if it moves the data off of the faulty area.  Or it might cause more problems (if there are more "bad" areas in this drive / array that get written to).


  Can I run chkdsk on the D: drive (need to dismount) without messing up the database?


Again you can do that, but there are some caveats.  Tony mentioned one in a comment:


  You will need to stop SQL Server or detach all databases that have files on D: before you dismount it.


So there will be downtime involved for this.  Tony also mentioned that, before disconnecting everything, you should take a full backup and restore it somewhere else, to make sure the backup was good.  That way, once you have finished chkdsk and resolved any issues there, you can confidently restore from that backup.