The removal period was too gradual to be an actual ban, in my opinion. When they want your site out it goes all at once fairly quickly. To me this suggests a filter of some sort.
- remove the robots.txt file completely, for now.
- ask the site owner for an honest answer about their use of paid link services, you can't repair that easily or at all if they don't fess up with specifics. A definitive "no, we didn't use a paid link service" is just as good, you need somewhere to start.
- remove all links to the site Google states was against their web guidelines and ask for reconsideration.