There is plenty of space on the disk. You are getting this error for a different reason. If your machine is anything but a desktop then you would get the error you have.
https://technet.microsoft.com/library/354e5163-f388-4354-984c-ea4e4206694c
You aren't able to delete the recovery partition because it EFI protected. You should be able to force by using the override command.
https://technet.microsoft.com/en-us/library/cc766465(v=ws.10).aspx
I would try using diskpart (from an elevated command prompt) to delete the partition.
DISKPART> list disk
DISKPART> select disk 4
Disk 4 is now the selected disk.
DISKPART> list partition
Partition ### Type Size Offset
------------- ---------------- ------- -------
Partition 1 Primary 223 GB 1024 KB
Partition 3 Recovery 450 MB 223 GB
DISKPART> select partition 3
Partition 3 is now the selected partition.
DISKPART> list partition
Partition ### Type Size Offset
------------- ---------------- ------- -------
Partition 1 Primary 223 GB 1024 KB
* Partition 3 Recovery 450 MB 223 GB
DISKPART> delete partition override
DiskPart successfully deleted the selected partition.
DISKPART> list partition
Partition ### Type Size Offset
------------- ---------------- ------- -------
Partition 1 Primary 223 GB 1024 KB
After that you should be able to convert to dynamic disk.
Usually I re-purpose drives so I don't worry about data loss, but back up your data and use a desktop.
