One site we work on has masses of blank space in their html code. Is this a problem for SEO and google ranking and could it even be a factor that has caused this site to take a hit from the April 12th panda update. (because the site content is unique and it does not display ads etc).
While probably not related to Panda, page load speed can be an issue. It all depends on how "massive" the blank space is. I've seen some page file sizes balloon to well over 200K because of white space- look at the page source and you may get several screens of nothing before seeing any text. On a heavily trafficked site, that can add up to some wasted money in bandwidth charges.
I was thinking googlebot might automatically remove or collapse extra whitespace (as html itself does) so I went and had a look. The version they show you doesn't; it's the raw html exactly as I wrote it. But it's still perfectly possible that they detour to a routine that does get rid of the whitespace before it starts doing its Google Stuff.