There’s a long post over at Google Groups discussion on the Google -60 penalty, which sometimes can set a site back in Google 60 placements due to bad linking, saying that such questionable tactics like paid links in various templates can indeed negatively influence a site’s rankings, especially when those links are identified and Google takes away that juice, which could be seen as a penalty.
Google’s Matt Cutts has responded on the on going issue:
Note : Matt did not single out the -60 penalty, but the discussion is centered around various Google penalties associated with bad linking.
ShyBoy, have you been collecting backlinks in any unusual ways? It looks like you may have, and I would pay special attention to that. For example, if you had been attempting to get PageRank via paid links on various templates, then when that PageRank stops flowing (e.g. if Google improves its detection in various ways), the fact that you have less PageRank can also mean that a site won’t rank as well.
If that applies to you, my advice would be to pay special attention to that issue, in addition to the other good advice you've already gotten.
Shyboy, those are good steps and I'd tackle them in earnest. After you feel comfortable about the paid links being gone, I'd do a reconsideration request.
Another way to refine that search to get more root domains:
Goolge, Links, Linking, Penalties, Google -60, Google Penalities, Search Engine, SEO