Are you sure you are penalized? So, no page can't be found in the index and the PR is gone? If so, did you try a reinclusion request? I wouldn't make a new site for this reason only because with a new site it will take a long time before you get a good position in the SERPS. After cleaning the site and having enough good content you have good chance your site comes back after penalty period (and maybe sandbox because of new content). In the mean time you might want to build a new site with it's own content to spread risks.
I doubt whether showing ODP content on your site is a reason for penalizing by Google. Just select one particular ODP category, and enter that term in Google: you'll find dozens of ODP clones (with or without ads).