I recieved some bad advice about four years ago and was stupid enough to follow it.
One of my older sites received a google penality for "cough" log spamming..
I was busted when I applied to Adsense.
The site is now well [ unsolicited ] linked from social networks, and some high level blogs.
The site is still in the pooper and I really don't expect to see it ever come back in google search.
Some old versions of the homepage exist in various forms in google search, without a description and will rank on page one for relatively competitive terms, otherwise it is awol.
I could do a reinclusion, but it gets enough profitable traffic without google search, so I am not going to bother.
So some penalities are never removed unless you ask for forgiveness.
Also, the penality goes beyond the domain name, it extends to the content.