since backlinking to the specific domain was what angered the godfather...oops...i mean google then i would think you can migrate to a new domain, change the site a bit so it's not exactly the same, and then proceed with your new and improved backlinking strategy
i'm no expert but i don't think google would permanently ban good content based on (what they perceive to be) previous seo mistakes made on a different domain
No formal penalty (didnt get a message on webmaster tools) and its still indexed but on Oct 14 my position in the SERPS fell severely and I lost 70% of traffic
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