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That's a really tough spot to be in, Valery - I can sense the frustration! As far as your last question is concerned, Matt Cutts, in the blog post clarifying the new link warnings, specifically states that you should inform them if a network is charging to remove links: In a few situations, we have heard about directories or blog networks that won't take links down. If a website tries to charge you to put links up and to take links down, feel free to let us know about that, either in your reconsideration request or by mentioning it on our webmaster forum or in a separate spam report. We have taken action on several such sites, because they often turn out to be doing link spamming themselves. Have you tried asking for this same kind of help in the Google Webmaster Forum? Wouldn't hurt to double your possibilities - I've heard of some folks getting direct responses there. It's possible that there was more than just dirty links going on that added to the penalty - assume you've looked for and cleaned up all the other Black Hat techniques that might have been in use? Sorry, no experience with the link removal services so no help there. The folks at  Link Research Tools have just recently released a nearly free Link Detox tool to look at link quality - might be worth running to see if it flags anything substantial you missed. I'm sure your patience has just about run out, but I'd stick with it a little longer, especially if the site is otherwise high-value. Good luck, and let us know how it goes... Paul

Just to add, I've just had an error page on trying to reply to another question, hopefully Roger is on the case!!

ThompsonPaul - Thanks for that info, it pretty much nails exactly what I had discovered independently. This is an IIS7/Win2k8R2 install so luckily the rewriting is a bit easier than in previous iterations. The whole platform is hand coded by us (after the 10th ecommerce site or so you can generally do them in your sleep) so I don't have to worry about CMS implementation and the like, and luckily we already knew that about the spaces so they simply aren't allowed in the filenames. I'm in the middle of making a regex right now that is going to down-case anything in an href="" or src="" tag that will hopefully handle everything on the site side user-created or not. Will consider what to do in regards to external links a bit down the road I think.

Thank you for the update NIck. I've noticed that the same reports are still 'stuck' where they were 6 hours, should I cancel them and just start new ones you think?

http://www.seroundtable.com/google-updowner-ignored-15369.html Looks like Google is on top of these guys so at least their links won't get you Penguinized.

Now that nofollow links are "evaporating" PageRank, to use Google's terminology, I think you have to count them as normal links. No-follow or follow link doesnt important you need to count all links. On-Page Report only count page link.