I do think its a penalty. I did encounter that kind of problem before. the only solution I did is I gave up the domain name.
In my situation it did dance. but then after 2 months it was stuck on the last page in every keyword that my site held.
I'm not that hopeful that is why we have created a contingency plan and planning to transfer all of the articles in a different domain. and we'll see if we can get it done without facing that kind of phenomenon.