idolw - 12:55 pm on Jul 24, 2012 (gmt 0)

Absolutely, do not panic. Never panic. If you are certain that the links you built are crap, then you're probably starting to rank where you are supposed to rank should your crap links not be useful anymore.

Yes, the site I am talking about has mostly crap links and as you wrote:
- a broader set of keywords is affected (pages that were not promoted via link building lost rankings, too);
- seems like the entire domain lost part of its power.

So the question now is: shall one waste time on getting rid of the links or just work on high quality links?