lindsaydumped10.jpg Despite previously confirming that Lindsay Lohan was still set to play porn star Linda Lovelace in Inferno, director Matthew Wilder now reveals that they are dropping the troubled starlet.

"We are withdrawing our offer from Lindsay Lohan," Wilder tells E! News. "We are currently in negotiations [with another actress] and working out the legalities of bringing her onboard."

Wilder added, "We have stuck by Lindsay very patiently for a long time with a lot of love and support. Ultimately, the impossibility of insuring her and some other issues have made it impossible for us to go forward." So how does Lindsay feel about all this? Her rep tells E!, "Lindsay is dedicated to her recovery and together they decided to move forward without her."

Hey, at least she still has The Dry Gulch Kid with Willie Nelson's production company! And when we spotted her out and about last night in Palm Springs, she didn't seem too upset about this latest announcement...