need a dynamic source for data validation drop down lists

What i am looking for is a way to modify the "base" source for data validation drop down lists...all drop downs have the same base source for the list, but as items are chosen, they get removed from available choices, or if they get deselected, are re-added to available choices...i hope this example workbook will help explain what i'm looking for.
If i have to use VBA or Macros I will, but would prefer to do it in Excel itself, if possible