Some advice for penalized site please

I have a site that was doing very well up until march last year then it got hit by the unnatural links penalty and dropped in rankings. I did all I could to the site to clean it up but, Google is not having any of it.

I have now given up and created a new and improved version on a different domain.

I know 301's could be a little dangerous but, the site still gets a nice amount of quality traffic so, what do you think of this plan?

Redirect all the old site's inner pages to the root domain to grab any traffic on these pages.

Add a link on the root of my new domain with something like "MyOldSite has been moved to a new domain http://www.mynewdomain.com"

I'm not too worried about getting any link juice I just want to try and grab the quality traffic.

I would just use a blank refer this way Google will not be able to tell where the traffic is coming from but you still get the traffic "winning" go a few steps further if you're really worried, blank refer it to web2.0 then redirect after a few seconds or make them click a button "we have moved here" to get to your new domain.

Keep the two sites separate. Learn from your mistakes and do not link them in anyway. If you are still getting decent traffic with the old site then keep it that way. Maybe one day it will come back and maybe not but nothing wrong with having two sites in the same niche.

Thanks for the tips guys

I would also keep the two entities separate, including the server IP address, webmaster account and so on. In my oppinion a redirect from a penalized website does more harm than good. The analysis on my competition shows pretty much the same thing. It's there in the game but not quite as it was before.

What I can also tell you is that at this point, I do not think that anyone can recover a seriously penalized website. For example, one of my sites was severely penalized 8 months ago due to parts of the content on it and has never recovered since. Any new content which was added post the penalty never brought additional organic trafic because it was down in the SERPS, so it is relying only on the content which was there initially (but not part of the penalty).

Cheers!
white_wolf