Site 1 has been live since 2004 and has participated in reciprocal link exchange for years. We've also acquired links through various other means such as guest blogging, directories like Yahoo directory, etc. About a year and half ago or so we started outsourcing our link building and these guys did such a great job that we got an unnatural links penalty.
It took us quite a while to get out of it by removing links and uploading disavow files. It took 3 reinclusion requests to have the unnatural penalty removed. The rankings never came back to their previous positions prior to the unnatural links penalty but the site still ranked somewhat descent. We also uploaded a more thorough disavow file about 4 months ago or so.
Site 2 has been live since 2008. We planned on rebranding and made this site with the new brand name. For this site we just built citations with the new brand name during this entire time.
A few months ago we did a 301 redirect from Site 1 to Site 2. Again, the rankings weren't that great even with this move so we decide to remove the 301 altogether about 4 weeks ago and see how Site 2 would do without all the link juice from Site 1. In the meantime, we also started doing things like guest blogging, etc. Now, the site is nowhere to be found for many main keywords ever since Penguin 2.1 arrived.
So, my question is: should we redirect Site 1 back to Site 2 since it does have quite a bit of link juice in it or should we just build links slowly for Site 2?