...and the most obvious solution is to 404 anything with a referrer from the pedo site.
I think advertisers who drop you because of who links to you simply need to learn about the web. I do not know of any ad network that does this.
Are you really suggesting we should cripple how the web works in order to deal with the reaction of people who do not get the web to unusual and extreme circumstances? Perhaps we should have to provide proof of identity to every site we visit as well?