I am someone with a site which got Pandalized.
Here are the quality issues that I can see on my own site objectively (as a visitor, not a webmaster / SEO)
1. I have ads on the left (Google ad reps told me its great)
2. Above the fold, 65 % of the area is Adsense and adlinks. The headline and the content are large enough, and people like the typography enough to let me know that.
3. I don't distract them - I need the ad revenue, and therefore, the related stories - which could improve my bounce rate - are at the end of the stories, not in the right sidebar where they would distract the user from the ads on the left.
4. Ads are not labeled as advertisements. Google in fact tells us to blend the ads well. Well, google Adsense tells us. Thats not probably what search quality team wants.
Overall, this has worked for me. Till now. Regular readers ignored the ads and liked the clean font and content, and SE visitors clicked on ads a lot more than comparable websites. I thought all was good and everyone was happy.
But if revenue was not so important to me, I would have added related posts to improve engagement, added facebook widget to drive people to become fans, and removed adlinks. I hate adsense from a design point of view absolutely. But I have reasonably high quality, unique content and I made money and regular readers were happy.
If I could run a site and survive with quality, I would do it and get rid of all Adsense right this moment.