Nagani - 1:15 am on Apr 26, 2011 (gmt 0)
I had that problem and eventually fixed it successfully. But I am not sure it was about over-optimization or paid links. Ranking had lost for one major keyword - from #8 to #28. I tried to remove or change the anchor text backlinks from other websites but to no avail. It was only after I removed 2 paid links which didn't have editorial citations, my site got back its original spot #8.