LostOne, that's right I haven't recovered, I'm literally fixing my site this week based on this new understanding (and I expect the 30% of my site that I'm seeing as the problem to be sorted by the end of the week - most of it's going which is quick to do).
Then I'll keep improving while I wait for the next Panda update (apparently there was one yesterday - damn!). Should give me a better chance at the next one though.
I realise I will look pretty silly if I never recover, but if you could see what I'm seeing as I go through this process and look at my site you would be as 100% confident that this is the way to go as I am.
For the last 14 months I've been wasting my time, I can see that now. I'm literally looking at a product description right now, written by our content people (to address Panda) and it's overly wordy, doesn't describe the product very well....plus there's a customer review, put on the site unedited. It looks terrible. I've just rewritten the description and tidied up the review - the page looks quality now. Exit rate is 76% (bounce rate is 90% - net exit rate from internal visitors of 37%). I fully expect that to improve after my changes. Most are even more obvious than this!
Perhaps I should have waited until I'd seen if it got me out of Panda, but I think there's something in it and it may help to discuss the idea. As I do more work on my site I can see all the knock on effects of my bad content (home page linking to some high exit rate products, footer links to high exit rate pages, etc.). Seeing the interconnectivity of the bad stuff to the good stuff I can completely see why I have a sitewide Panda demotion.