Sgt_Kickaxe - 12:16 am on Jul 24, 2011 (gmt 0)
You sent out emails and were publishing sponsored posts without a)nofollow on the links and b)disclosing they were sponsored posts correct?
If that's the case it would only have taken one spam report, perhaps with a copy of your email, to trigger a manual review and if they found some questionable posts its safe (on their part) to question your entire site.
The good news - you have options.
#1 - They knew you would notice traffic plummet and would probably act to restore it.
#2 - Remove the sponsored posts or nofollow their links or robots.txt those posts... or a combination of the above.
#3 - Wait a few days for the dust to settle, it may be algorithmic, and file a reconsideration request if the changes don't help.
On their end they will again review your site to ensure compliance with their rules and will want to be sure you got the message and won't be a problem again. Sponsored posts aren't evil but with easy ways to prevent them from manipulating search results it's good.
Google is firm but fair, the penalty if one exists is not likely permanent.