It's well-established that crap links don't always have a negative effect, if the site being targeted has a strong enough profile.
The site in question does not have a strong profile.
Like I said this was for two terms only, two new terms, all other terms still doing fine. The fact that rankings tanked for exactly the two terms used for the crap directory links is a bit hard to explain otherwise hmmm?
is this off the back of a corn flakes packet. How can a site have strong profile if all of its incoming links are junk ? unless you're working on the theory of sending 10K links to that site from instant directories and directories that have 100K link outs from a PR4 home page. The PR can spread thing, but i think your proposing something that is not possible, and further arguing for absolutely junky linking