What's a Google penalty or why ignorance is not bliss - A tale of two web sites.
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Hi Dean. It will help your repair efforts to strongly separate the On-site and the Off-site issues. They live in two very different worlds.
The On-site stuff, like the rel=canonical issues you mention, are fairly easy to fix. Internal links (from one page of your website to another page of your website) are harmless. You can use whatever anchor text makes sense for them, and they should NOT be nofollow.
The Off-site stuff is really hard. This is usually about links pointing to your site from OTHER websites. That's where issues like sitewides, footer links, anchor text profiles, and follow vs nofollow comes into play. Unless you want to spend a ton of time reading and learning about these issues, I suggest hiring a pro to look through your link profile and suggest a repair plan. If you want to be really comfortable with the plan, also secretly hire a different pro to do the same job and see if they both come up with similar plans...
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It really depends on the extent of the damage whether you need a pro or not. If it's all self contained, as it sounds like, then it will just take identifying the duplicates, and fixing the linking problems.
To find duplicate articles just copy a part of the content and Google it with quotes around it. This will search for that exact text, and allow you to find the instances that it shows up on your websites. Fix accordingly.
As for the links, it's pretty much just a matter of using some link searching tools, Open Site Explorer and Majestic SEO, and finding all the instances where you have outbound links from one site to another. For the time being I would just separate them completely. After they recover you can go back to connecting them.
I just did this for a company out of Florida. They created their own link network, and it ended up penalizing them. They recovered in 3 weeks. They had a penalty, lower case and less destructive, and not a Penguin or Panda.