tedster - 4:26 am on Mar 14, 2011 (gmt 0) [edited by: tedster at 4:27 am (utc) on Mar 14, 2011]
Remember there is a big difference between excessive 404s on internal links compared to external links. If excessive external 404s could cause problems, a lot of webmasters would aim them at their competition.
External 404 links are shown in WMT as an FYI - not as a warning of impending trouble. So I ask whether any real traffic would come from those links. If not, I just forget about it.
[edited by: tedster at 4:27 am (utc) on Mar 14, 2011]