Three Questions: Has anyone here experiences an over-optimization penalty from google, and if so how did you identify it as such? Is it possible to over-optimize your internal links by overusing a keyword as anchor text? If you were to receive an over-optimization penalty, and it was due to on-site factors more than anything else, would changing your internal anchor texts restore the rankings you once held? Or is the penalty rather something that you have to deal with forever?
No.... Proper Onpage optimization will help you get back your old rankings. It will take some time to lift up from the penalty, but you will definitely get back the ranks.. Also keep doing regular Off page activities...
Over-optimization has alot to do with both on-page & off-page factors. If your internal links keep pointing to the same webpage using the same anchor text, then you might accidentally over-optimize. Just be careful, and keep everything as diversified as possible.