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I removed a lot of links that I assumed were harming me and I have dropped further.
I'm starting to think that the best strategy for recovery is to look hard on page and at you site's link and anchor text structure only after you have that sorted and should look at your back links.
I suspect backlinks are involved, which might take some time for Google to reindex.
I am not at all convinced there is much we can do to recover from Penguin. Very few people have done something and then recovered - most of the "recoveries" (and there have been very few) seem more likely to just be shifts.
[edited by: tedster at 6:12 am (utc) on Jun 4, 2012]
[edited by: tedster at 7:17 am (utc) on Jun 4, 2012]
[edit reason] do not list your keywords, please [/edit]
Why would Google consider a well-ranked site to be "webspam"? How can we see a business we have labored over for years as spammy? That's a bitter pill! I'm sure it takes s kind of objectivity that is hard to come by for a site owner.
I'd think about what your site can offer that other, similar sites don't. Otherwise, you're just one of many that are doing essentially the same thing, right?