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I did not think you had a problem until you mentioned very little static content.

I would get your static content up, just having the keywords is not enough, only a small amount of hits come from exact match keywords, by far the most hits come from the long tail, having plenty of supporting text helps you get the long tails.

Are the blog posts relevant, would they be supporting text? or would they confuse the message that you are trying to rank for.

I mean if you page is about cars and you have blog posts about dogs and cats, then you have a problem. but if the blogs are about cars then this can help. but I would still have plenty of static content as well.

It would not mater what it sees it as, its what renders that is important. but web servers can tell what is a directory and what is not, I assume search engines can too.

See menu on right handd side

http://www.seomoz.org/learn-seo

do you have any actions against the site in GWT?

if not I would not worry

where have you set this redirect, via magneto? or in the .htaccess file?

I would look in my htaccess file and see what redirects are there

Zsolt makes some good points

It not a problem, it’s a natural thing to do.
As far as PageRank goes if you link to every website from every website it will have neutral effect over all, but your worse ranking sites will get a boost at the expense of the higher ranking sites. You can alter your links to benifit a site you want to give a boost

But since there is value in link text relevance, you should come out on top all over
Having said that it’s better to link in a way that looks natural to your users.

I would not have these as my only links if they are on the same ip number, but as long as you have a good range of links from other places it is ok to have links from the same ip number. i think people get a bit excited about same IP or same C-class.

It would look unnatural, and you have a point about what may count in the future

Azure does Linux also. Best set up a virtual machine and select an image, there are many to choose from, windows and Linux.

http://www.windowsazure.com/en-us/

Go to webmaster tools either Bing or Google, Bing seems to have a more complete list. then do a 301 to the relevant pages.

It may be a bit of bother, but it is easier then getting new links

If you use nofollow, then every link pointing to those pages will throw away their link juice, you don't want that.
Follow means that link juice will flow though the links back to your indexed pages. Telling google not to index is doing them a favour as they don't want duplicates I don't think there any concern.

I remember tests being done in the past and title tag in a link does not pass relevance to the linked page, but it could possible add relevance to the linking page

to make that clear, image page A has this link

dogs

Then page B may rank for dogs even if the page has no mention of dogs because the link text has passed relevance, but I will not do the same for cats.

But if page B was about cats, then it may be possible that search engines see this link coming from a relevant page because of the title attribute. Probably not, but posible

Just adding to what Zsolt has said.

if google has both the new and old url, you need to 301 the old to the new, and rewrite the new to the old. cardul not to create a loop.

Google will se these 2 urls as duplicate content.

i also can not see any advantage in url-rewiting the urls you posted.

Sorry missed the bit about blog.
obviously blog.domain.com should not 301 to www
it should point to the correct site, then all reports and google will sort themselves out.

so add one more step, test that blog does in fact resolve to the correct site

no I don't think so, you would be cleaning up their index for them.

You can buy a 1,000 links for 9$ all from different domains, and then you could prooably get one link from a decent souce that is worth much more then alll of them.

numbers really dont mean much, thats why they have metrics like domain authority and trust, that try to take all this into account

Ok, I think I understand a bit better, you don't have a blog?
Then I would remove the dns record for blog, if you cant do that then yes you could 301 redirect

You can do this in one redirect following the logic
if not www.domain.com then redirect to www.domain.com

My guess is the large number of 404's was wasting your link juice(100%), also you will lose something from all the 301's (approx 15%),

as for the source code changing I would not worry about change itself. as long as the code has no problems. It a change in content that is the concern.

some other points,

2 weeks is not a long time for things to sort themselves out with this many pages.

You don't need to 301 redirect all the pages, just the ones that had external links.

Also just for interest, Bing treats a 302(temp) that has been in place for a long time as a 301, likewise a 301(permanent) that keeps changing is treated as a 302. Maybe google does the same, I don't know.

I would fix all the 404s and wait

i would not be in too much of a hurry.

if you get 10000 in the next few months and then none for the next year, then it will look strange. try and keep it consistant over time. If i was a search engine this is what i would be looking for

in htaccess "!" means not so try this

RewriteCond %{HTTP_HOST} !^www.domain.com$
RewriteRule (.*) http://www.domain.com/$1 [R=301,L]

also when using regex special chars like "." should be escaped with "" see above www.domain.com

1. unless you have a big thin content problem there is no gain

2. completely reversible, just remove and wait

3. you will have to decide, you seem like you are on the right track.

4. Question you should have asked, is there any downside to no-indexing these pages, Answer Yes there is, all links pointing to a no-indexed page will leak all their link juice, noindex is a last resort, I have never used.

if you must noindex a page, do it with a meta no-index,follow tag, note that was "follow", not "no-follow", then your link juice will flow into the page and back out again.