My main site got hammered by another penalty in April 2007: The Google -950 Penalty.
This means that pages on your website go to beyond page 950 in the SERPs, but only for certain keywords.
In practice it means you’re nowhere for the keywords you’re targetting, but can be found for unique or low-competition phrases on your site.
It’s got some prominent webmasters at Webmasterworld.com foxed. It seems an erratic penalty; some pages suffer, or most pages suffer, and some don’t.
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Some clever people over there eventually figured it out: It’s an over-optimsation penalty, especially in regard to internal navigation.
If you have lots of links, with keyworded anchor text, on lots of pages on your site, and your keywords are not supported by related external backlinks, then you may suffer this penalty.
In my case I had to write Perl scripts to completely deoptimise my sites automatically, and remove heavy SEO i.e. got rid of H1, H2, title and alt tags, keyword image names, and the like. In effect, turn seven years of tweaking off. Seems to be working at the time of writing.
My site had also, unnoticed by me, gone into Supplemental Hell (some pages ranked, most pages on related keywords don’t), so this was a wake-up call big time.
As ever, the cure to all Google penalties is relevant links with diverse, but on-topic anchor text, from related, high PR/authority websites.
Point one of these at a penalised page and ta-daaa, you’re ranking again.
Backlinks are the key to how Google operates; all else is secondary.