Hi Marie:
Thanks for your very thorough response.
My site dropped in rankings in April 2011 and never completely recovered. I had a site audit and they really stressed the urgency of removing toxic links to my site.
For the first time I looked at links using Majestic SEO and noticed that most are from low quality directories and many have the same IP address. Also I have seen Domain Authority on MOZ drop from 38 to 27 in the last year. Page authority at the moment is 38.
The audit (from a reputable MOZ approved SEO vendor) found the site to be pretty good technically (unique content, fast download, no Google or MOZ errors, etcetera). I think they checked the links with software, not manually.
Regarding the Google penalty, I never received any sort of written notice on Google Webmaster Tools.
The SEO firm is confident they can remove around 60% of the toxic links. They in no way promise to remove all. So from what you are saying, even if a few remain I may be in trouble. Furthermore they are not at this point addressing the "suspicious" links.
I'd like to point out that there are only 445 domains linking to my site. Would it be possible to overcome the penalty by building thousands of high quality links over time? I am also concerned that removing these links before adding new ones will really cause my traffic to drop (I receive about 4,000 unique visitors via search each month).
Is there any kind of action that I can ask the SEO provider to take to ensure they will be removing the bad links? I would hate to spend $3,000 and find the site still penalized by Google for bad links.
One last thing, I am particularly concerned by your last paragraph. Are you saying that it is very unlikely that Google will lift this penalty no matter how many new links are built of how many bad links get removed; that the domain my domain is in a sense "blacklisted"? That since the links were never very good, Google will never remove the penalty? If that is so, there is no sense in investing in link clean up.
THANKS,
Alan