If it's Panda, then I'd clean up the content and only merge the best performing pages. Cut everything else.
If it's an unnatural link penalty or something of that sort, I would be cautious.
Between January - November 2011, I had a site that was doing well with some shady link building. In December i transferred it with a 301 & Change of address to a better domain I had just registered. I didn't build any new links to the site and it received the unnatural links notice a few weeks ago.