We use Mozy Pro which uses VSS to backup the SQL databases.
When it restores it does this by copying the mdf and ldf files for the particular database. I think your right about the snapshot info. If that is the case then the backup is kind of a waste of money.
Unfortunately we have a maintenance plan in SQL Server on the other databases that does a full backup to a .bak file but for some reason the database in question didn't have this setup. Also your are correct about the database status it was set to simple.
I don't fully understand how I could restore from the VSS backup and restore the logs? Do you have a step by step on how I could try this?