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The domain name is about to expire. I was wondering if I let it expire then get it back, will the penalty will be reset as well?
Or is it too risky that I will lose the name?
Are you sure this site was penalized, or that just all the guestbook links were ignored? Given how easy it is for someone to sign a competitor's URL to a ton of guestbooks, Google should not be penalizing for this. Are you sure your site isn't ranking low just because if the guestbook links are ignored, it lacks substantial natural inbound links to rank decently?
On the other hand, I'm not convince that guestbook entries are really all bad, one of my competitors that ranks #2 in a phrase I'm pursuing has about 80% of his total links from guestbooks, mine are all clean and I can't seem to knock him out of that #2 spot.