walkman - 11:01 pm on Jul 23, 2011 (gmt 0)
I had to offer something at one of these sites and asked them to remove the link after mission done just to be safe.
Now for the background. The interns I hired were doing link building by emailing relevant blogs and asking for links and/or a review of the site. We had a lot of feedback on sponsored reviews, so we did quite a few of those. Traffic had been up from these, and we didn't do anything special like put rel="nofollow" on any of the sponsored post links.
What he says /I say means nothing, but you have all hallmarks of being manually penalized. The good news is that sponsored 'reviews' are easy to remove--if that was the only thing. The maybe bad news is that Google will now manually review the content too.
However, I spoke with an SEO buddy of mine, and he is finding it hard to believe that a couple dozen sponsored posts would have blacklisted us.