A recent post I found useful suggests that there is a strong possibility that a Google penalty can actually make your site stronger than ever before. Think about it, you must be doing something wrong on your website to receive a penalty in the first place. So, by cleaning up your act/website and making some much-needed alterations to your site as well as the way you do things you’ll be well on your way to a better, if not stronger, website.
Now, that’s not to say things will be back on track over night, but once the penalty is lifted you’ll have a stronger site than before and be on your way to achieving similar rankings to those you had lost due to the penalty.
You can read more at http://www.searchengineguide.com/ross-dunn/how-a-google-penalty-can-make-your-site.php – the post I came across and gives an example of a site that did particularly well within Google with few links but suffered a penalty due to over-optimisation. Read more about how they plan to clean up their site and become the competitive site they once were… and more.