purplekitty - 5:40 pm on May 19, 2013 (gmt 0)
To be clear, I have zero paid links. Never have. My assumption at this point is that Google sees my two sites (same industry, different disciplines) that were hit as a link farm based on what was pointed out to me in the Google webmaster group - I link heavily back and forth between them for people who like both disciplines. That assumption makes logical sense.
I do have some affiliate links on one of my other sites, but that site is still tooling along as per usual with no problem pre- or post-penguin.
I have never been concerned with linking out before. I've done it when it made sense and have never nofollowed anything, not even affiliate links, until a couple of months ago when the advice was nofollow your links, you spam link farm!
I'd love to get some of that lost traffic back. So we'll see.