Sandbox does exists it basically means playing around with Google in a sense if you're mass backlinking or even if u drop alotta links your page will sink deep inside of google, just 1 thing dont panic keep building strong relationships with same niche sites and keep updating it regularly it will catch up.
Totally agree, I got a Squidoo page that has never been promoted, linked to by anybody, starred, commented (though Im sure it has been visited by surfers), and yet it has a PR 3. On the other hand, I got a bunch of sites and squidoo sites that are well promoted, and yet their PR is "n/a", and they dont show up in Google if you look for them using the syntax "site:www.etc etc". So content is really key and king. And it pays to associate with clean sites. And though I really hate conceding so, it seems wait we must.
To get your site out from sandbox, don't use any blackhat for your website, get deindexing of those links which have been penalized, and give fresh content to your website and start reindexing of your website again. Always try to get good thematic backlinks from relevant website...