Planet13 - 4:51 pm on Aug 13, 2011 (gmt 0)
If you wern't using paid links, then do you mind if I ask whether you might have an idea why your site is penalized?
Is it only certain terms that don't rank, or is it all terms?
I don't think anyone knows if Google does an automatic review when a site rises to a particular spot in a competitive niche, but you can bet that your competition will notice and will file a spam report if they think you might be up to no good.
Whether Google will act upon that spam report or not is anybody's guess.