tedster - 3:51 pm on Aug 5, 2010 (gmt 0)

Here's what I would assume: Those WMT links are newly reported, but they are NOT newly discovered. Google had that link data all along, but kept in their back end only.

It is quite possible that the ranking drop is not related to the links appearing. And although it's not impossible for a competitor to trash your rankings, it is quite rare.

Because its unclear where these links may have come from these links should be just discredited or devalued and not hurt or penalize the website that unknowingly received them.

Yes, exactly. That is the way things work "almost" all of the time. But if you feel, after some real due diligence, that your site is an exception and someone else has managed to trash it -- that's what the Reconsideration Request is for. And the more precisely you can document it for the Google team, the better.

If you do file a Reconsideration Request, check out this video [webmasterworld.com] first.