Translation:The red dress was really very beautiful.
You would just drop the -i. Basically, Turkish grammarians still use the old words to describe things that are not used anymore. "idi" as a past tense marker is really not used in contemporary Turkish, and its replacement -(y)di is much more common. Since 'güzel" ends in a consonant, you would drop the -y off of -ydi and just get -di :)