The type of advice some people give around here is so lame I'm amazed.
I won't give you any advice myself because I don't like to try to revive a dead horse. I just move on because I have the infrastructure to recreate an entire site in a couple of days with minimum cost. That's me, though.
As much as I'd like to say I know what to do in case of a penalty, truth is, I don't. Likely I will never know. Google is so erratic about some penalties that as logical as I am I can't figure out what was the cause of a penalty. I had 100% whitehat sites with super high quality content get penalized and I have 100% blackhat sites with gibberish content rank well for a long time. Had sites with quality links get killed and had sites with crap links stand up straight through every update (my definition of crap links is different than most people though).
Bottom line is, sooner or later any SEO that know what's best for him will end up going blackhat and building sites that he doesn't care if they get penalized or not. This is not the SEO trying to game Google, this is the SEO surviving Google's rules. When you can't obey rules and do well, you go against the rules or you die. This is not just something Google is trying to fight against, this is something Google itself created by trying to cope with the inherent flaw in their algorithms (which will exist no matter what they do). Instead of trying to do their job passively they started to impose crap on webmasters. Do this, do not do that. Make links nofollow, don't sell llinks, etc. WTF are they to tell a webmaster he is not allowed to monetize his site however he wants (sell links)?! Really. People take shit for granted and don't stop and think. The web was naturally a very open place where everybody linked to anything without any restraint. That's how the web should be. But it ended up being a place where people won't even consider linking to you unless you pay them or they have something to gain. That's just fucking ugly. Is like Wkipedia would not have a page about Microsoft because Microsoft didn't agreed to pay to have a page. And btw, those who want to sell links can sell links and not get penalized bc they are treated preferentially. I can tell you it is possible to buy links (actually posts/news/stories/etc.) on huge sites like bbc.co.uk, cnn.com, nytimes.com etc. You'd have to be a bit out of your mind to pay $500-2000 for a post there but some do because they also get the traffic and stuff and for them that's worth it. Point is, it's still a paid link.
Good luck but don't get stuck into the "OMG my site is gone!" mindset and don't try to spend or your resources in trying to revive it. Unless you were making $50,000-100,000/mo with that site is just simpler to start fresh. In the long run the effort you put in and the resources you consume make it "cheaper" and more worthwhile. Try to recover it if possible but have your focus to the future not to the past. Also, just as it was the case with me, something like this can be a great eye opener to the importance to avoid keeping all eggs in one basket. In other words it is best to have at least several sites, money streams, hosts, registrars, everything. Is a logistical nightmare until you get the hang of it but in the long run it makes the entire operation safer.