Forum Moderators: mack
This is a good question, and hopefully bumping it up will get you some answers. Make sure you give your threads descriptive titles and descriptions - that'll help them get more attention.
It wasn't clear from your post - Did the site have PR6 and PR7 while you owned it, or was that before you bought it?
It may also have had a shady past. Or possibly, the old incoming links are being ignored - Googleguy said they intended to ignore incoming links to sites which changed owners after the links were established. In that case you'll need to get some new incoming links, and that's a good opportunity to get better ones, with your favorite phrases used for the link-text.
Other than that, make sure you're not linking to any "bad neighborhoods", and read the Google "Quality Guidelines" in their "Webmasters" section.
Hopefully, someome will come along who's had a similar problem to yours, and can give you better answers.
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Jim