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Assuming that you didn't use any questionable linking practices to get your site where it was before the penalty, I would submit the site for a manual review.

If you were using some gray hat tactics, you'll have a much better chance of getting rid of those links than the ones that were so generously pointed your way. So, you time would be better spent getting rid of the links you wouldn't want them to see that you actually built vs. trying to eliminate the ones that were likely sent by a competitor. The other alternative is to blame all of the bad links on the competitor...again, assuming that you built some links you don't want Google to see.

The other option, although more painful, is to wait it out. I've seen several sites get clobbered by competitor's nasty link building tactics and after a few months they all the sudden popped back into the SERPs higher than they were before hand.

The other thing I would suggest is to make sure those links are the source of your problem, i.e. how's your anchor text? Is it over optimized? How about on-site? And how could we forget good ole Panda and it's many, many revisions. Are you certain that it didn't get hit in the 2.14x update? (I'm kidding about the numbers...it just seems like Panda is never-ending.)

Good question. I think you can go either way.

Assuming that I was targeting all of Nebraska, not just Lincoln, I would:

Create a page targeting Nebraska and create sub-pages targeting the major cities in Nebraska.

For example:

Personal Injury Lawyer & Attorney Nebraska

Sub page: Personal Injury Lawyer & Attorney Omaha NE

Sub page 2: Personal Injury Lawyer & Attorney Lincoln NE

I would then link to each page with geo-specific anchor text. Once I got the main page high on the first page, I would try to rank the sub-pages for "Nebraska" as well to get an indented listing and take up more of the SERPS.

Another benefit of structuring the site this way is that if you had locations in each city, it would be very good for Google Places.

However, I would only follow this page/subpage strategy if I was confident in my link building strategy, i.e. that I could get enough geo-specific links for each sub-page. Otherwise, you might be walking into a Panda-type scenario where you have what Google perceives as extraneous, useless pages.

I would personally go with "Personal Injury Lawyer Lincoln NE". Google is smart enough to associate NE with Nebraska in this context (As can be seen by highlighting in the serps) and it's shorter.

This may not be the answer you're looking for but....

The best keyword research tool is AdWords. Yes...it cost money, but think about it this way...You get a client that's paying $2K/month. You use all the keyword tools and decide on a several keywords, but really go after 2-3 which you target on the homepage. 2-3 months later when you links start kicking in you realize that the kewyord volumes reported by all the keyowrd tools (especially Google!) were wrong. You've now wasted 3 months and $3K of your clients budget on optimizing for the wrong terms.

In reality, you could have run a PPC campaign to get almost perfect keyword volumes (especially with by using the impression shares and search terms reports). Sure, it matters how much the PPC costs are for that keyword, but the idea when doing a campaign like this is to get your ad on the front page, but NOT get it clicked. Do things like bid high but write the worst possible copy you can. (It's actually kind of fun!) Also, get a coupon to get a $100 of free research.

It's best to do this for a month, but if you can only afford to do it for a week, nine times out of ten it's far more accurate than Google's keyword tool. Also, when you do this you can get your server logs to determine every keyword that TRIGGERED your ad, not just keywords that resulted in a click.

****If you have the budget to actually try to generate clicks, this had an additional benefit. Try as many ad copy/headlines as possible. The copy with the highest CTR will likely be an excellent choice for your meta description and title tag.

Another option is to do this on AdCenter. It's cheaper and they'll give you every keyword that triggered an ad with Excel add-on (only if your using a PC....argh!). If you use AdCenter, just multiply your results by 3 to get an estimate. Again, it may not be perfect, but it's way more accurate than the keyword tool.

I'm at the point where this is pretty much the only way I do keyword research. It's a small investment for the potential benefits.

If folks find this interesting/helpful, I'll write a step by step blog post....I've also been collecting all of the keyword volumes I'm finding with Adwords/AdCenter (and confirming with GA) and comparing them with keyword research tools, particularly Google's. From what I found this far, I honestly don't use Google's keyword tool for anything other than finding other keywords and getting a very, very general idea of which keywords should have the most volume.

I would personally go with "Personal Injury Lawyer Lincoln NE". Google is smart enough to associate NE with Nebraska in this context (As can be seen by highlighting in the serps) and it's shorter.

This may not be the answer you're looking for but....

The best keyword research tool is AdWords. Yes...it cost money, but think about it this way...You get a client that's paying $2K/month. You use all the keyword tools and decide on a several keywords, but really go after 2-3 which you target on the homepage. 2-3 months later when you links start kicking in you realize that the kewyord volumes reported by all the keyowrd tools (especially Google!) were wrong. You've now wasted 3 months and $3K of your clients budget on optimizing for the wrong terms.

In reality, you could have run a PPC campaign to get almost perfect keyword volumes (especially with by using the impression shares and search terms reports). Sure, it matters how much the PPC costs are for that keyword, but the idea when doing a campaign like this is to get your ad on the front page, but NOT get it clicked. Do things like bid high but write the worst possible copy you can. (It's actually kind of fun!) Also, get a coupon to get a $100 of free research.

It's best to do this for a month, but if you can only afford to do it for a week, nine times out of ten it's far more accurate than Google's keyword tool. Also, when you do this you can get your server logs to determine every keyword that TRIGGERED your ad, not just keywords that resulted in a click.

****If you have the budget to actually try to generate clicks, this had an additional benefit. Try as many ad copy/headlines as possible. The copy with the highest CTR will likely be an excellent choice for your meta description and title tag.

Another option is to do this on AdCenter. It's cheaper and they'll give you every keyword that triggered an ad with Excel add-on (only if your using a PC....argh!). If you use AdCenter, just multiply your results by 3 to get an estimate. Again, it may not be perfect, but it's way more accurate than the keyword tool.

I'm at the point where this is pretty much the only way I do keyword research. It's a small investment for the potential benefits.

If folks find this interesting/helpful, I'll write a step by step blog post....I've also been collecting all of the keyword volumes I'm finding with Adwords/AdCenter (and confirming with GA) and comparing them with keyword research tools, particularly Google's. From what I found this far, I honestly don't use Google's keyword tool for anything other than finding other keywords and getting a very, very general idea of which keywords should have the most volume.