TOI, I agree with you about the "ding you for making changes" patent algo. It seems to have been designed to make recovery from algo slaps difficult if not impossible: do nothing, and you won't recover, but if you do something, you may or may not recover, and you'll also get slapped by this other thing so that you won't be able to tell.
This may in fact be my situation.
My Penguinized site - which, like many here, was actually totally hands-off on link development - was my most meh site, from a user perspective, but Google had ranked it very well for years so I was afraid to make the drastic changes I felt it needed. If any of you compete with me, my site would probably have had you questioning why it ranked so well - it wasn't spam, and it wasn't bad, but it certainly had no business being #1.
Then Penguin came, and it wasn't. 80% of my G traffic disappeared, so there was no reason not to make the changes I felt it needed. I knew about the "ding you for making changes" algo, but didn't care. So I changed the domain name for re-branding. I improved pages that had ranked well even though I thought they were kind of crap. I got rid of some pages and built some new pages. All this by the end of June. Predictably, my Google ranking fell even more.
Then I stopped making changes and started focusing on other sites. Months passed. (BTW, Ralph Slate, I did not see any kind of change on October 13, but then we may have very different issues with our sites.)
Suddenly at some point in the last couple of months (that's how often I check my G rankings), my sitelinks - which disappeared right before Penguin - made a modest return, and some of the terms I'd been de-indexed for came back... very, very low, but at least they're there.
Is this a Penguin recovery, or just a recovery from the "ding you for making changes" algo, or what? Impossible to tell. And not worth thinking about anyway - they're still only sending me about 37 visitors a day, so I really don't care how they rank my site. I have other traffic sources, and I'm connecting with users who like the site as it is now. If Google prefers not to be part of what, who cares. I have reasons to believe they are no longer dominant in my niches anyway.