brinked - 6:25 pm on May 29, 2012 (gmt 0)
I only 301 the homepage of the purchased site to my own site, the rest of the pages were server not found.
The website had completely different content than my site, so no duplicate content issues. Both websites were about free widgets.
As soon as I removed the 301 redirect, the 301 domain was ranking very high (within 2 days), the site it was directed to didn't lose any rankings which leads me to believe the 301 lost its effect to my site.
To elaborate further...
Site A is my original site and site B was the website I purchased from a competitor. I purchased site B from a competitor and 301'd the homepage of that site B to my homepage of site A. This resulted in great ranking. Top 5 for 2 years for free widgets.
When panda rolled out Site A then dropped to 2nd page, then it kept dropping after each iteration of panda it lost legit backlinks and eventually fell to page 4.
I removed the 301 redirect from site B going to site A. Within 2 days, site B was ranking at #12, higher than it ever ranked, even when I purchased it from said competitor. All while site A did not move at all. In fact A has now slowly begun to raise up and is now page 3 and seems to be moving up a little each week.
Site B was a blank page, ranking high for a highly competitive term when it was re-indexed after the 301 was removed.
Hope that makes sense.