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Thank you Miriam. Yes those posts did help and have set me straight on H1 tags.

Impact of nofollow links from a technical perspective Matt Cutts is a distinguished engineer at Google, and as per him; the simple answer is: No, too many nofollow links have no effect on your website’s PageRank. These links were created to ensure that generating direct traffic to a website could be used as much as needed without compromising the overall quality of the website’s SEO. Therefore, from a technical perspective, the PageRank algorithm will ignore any and all nofollow links. These links are automatically dropped from the link graph as the web crawlers index the web. However, there are exceptional cases where nofollow links will have an effect on the website ranking. Special cases where too many nofollow links have an impact It is possible to use nofollow links to spam websites on the internet trying to generate traffic for whatever product you are promoting. This tactic was once used on blogs where a spammer would post outrageous or absurd comments so as to attract attention and generate traffic. This is deception and manipulation, and where it is done on a large scale, Google will take notice. If many people report you for using nofollow links to spam, Google reserves the right to take action with intent of stopping you. In such cases, they will downgrade the PageRank the offending website gets.

Thanks for your reply. I don't have any message and I've twice submitted a reconsideration request and both times told I had no manual spam actions. Maybe I've done all I can.

No problem! If you notice several bad backlinks, you could use a tool like removeem.com. Is a paid tool, but it will help you identifying those back links and contact the site owners. I hope you get it resolved.

Kris, decided not to buy the domain. Your info help me to conclude it was just too risky. Will see if I can negotiate a content link on the site instead. Thanks again for a great answer!

I see. I don't think it's possible to do what you are after I'm afraid

Thanks for your comments Bryan. It seems the Exact-Match Domains update on the 27 Sept exactly coincides with my drop. I'm not sure why I would be affected as my domain name is my brand not keyword. The other update on this day was Panda #20 but I don't what to take from the details of that update. I would say it's more likely Panda #20 and not the EMD update. Do you know what this means? "Abandoning the 3.9.X naming scheme"

Hey, no worries, glad it helped!

Sorry, the thread was getting a bit nested, so I'm breaking out this response, even though it relates to a couple of replies. Although it is tough to tell without specifics, I suspect that you do need to canonicalize these somehow. Geo-pages that only differ by a keyword or two didn't fare well in the Panda updates, and Google is starting to see them as "thin" content. I do actually think the canonical tag is preferable to a 301 here (at least from my understanding of the problem). As Aran said, the 301 will remove the pages for visitors as well, and they may have some value. While they're technically not 100% duplicates, Google is pretty liberal with their interpretation of the canonical tag in practice (in fact, I'd say they're actual interpretation is much more liberal than their stated interpretation). If the pages really have no search value, you could META NOINDEX them - it's unlikely that they're being linked to.