<< is there a nice way of fixing this. Should I try to smooth it out by
mudding around the stripe? >>
Pull down the old tape and start over. It won't be all that hard to do.
Opinions differ, but I find fiberglass tape easier to use in situations like
this. With luck you may not have to add too much more mud, and the less you put
on, the easier the sanding. Look over the NG archives for many good tips on
techniques. Dood luck.