What Caused My Site Penalty in Google?

My site was doing g-reat and on page 2 for a keyword with lots of competition on the way to page one. Then it disappeared and is still there if I search "mydomain.com" but all the way on page 200+ for any other keywords.

What I did a lot of was AMR to the home page and inner pages.

BUT....a few days before this happened I looked into linkadage and purchased a few links from there for the site. Is this what caused the penalty? I did look at the code for the site to see the link appearing and right before it the HTML said <----linkadage----> which was probably a dead giveaway and really dumb for the site owner and for me not seeing it before I purchased the link....but would that have been the cause of the penalty?

I also looked at the other site where I purchased the link from at linkadage and on googles latest cache view which the link box where the linkadage links is didn't show up....like google purposefully left it out of the indexing and cache view.

I removed these links a week after and it's been over a month now but my site seems to still be penalized.