Typically, once you add a host to a Storage Group it will disconnect from any previous groups. Since you have both hosts in the TestDev group (and they should both be able to see LUN1), it may be advantageous to migrate the VMs from host ESX1 to ESX2 while you configure a new SG for host ESX1. Then migrate them back once the LUN is verified online and operational.
You might also try posting on the EMC forums to see if their proven professional crew has another idea.