Was on front page - now stuck at rank ~200-700

When did this SEO expert tell you this? Google is always changing. What worked really well last year doesn't always work really well now. Content and backlinks will always be the foundation of SEO but there will always be major changes every so often that make it necessary to change your baclinking strategy. These days, using the same anchor text for all or almost all of your backlinks can definitely get your website banished from the first page. It's happened to a lot of people. It's never a sure thing, but it's a lot more likely to happen if you do it to a website that's relatively new.

You have to understand that Google has an image to maintain. It has to maintain the facade of being difficult to manipulate. If all or most of your backlinks have the same anchor text and/or were obviously created by you to get your ranking up for a specific keyword, Google has to punish your site to keep its reputation up. The trick is to avoid leaving a footprint. Google doesn't have anything against SEO, but it has to play this little game with website owners to avoid getting a reputation as a search engine that's easy to manipulate and whose top ranking websites are usually self promoters. Naturally, that would be bad for business.

Think of it this way: Google has a big yard and it just snowed. Getting from one side of the yard to the other is the equivalent of getting your site to rank well for the keyword or keywords you want. The problem is that Google is obsessed with keeping its yard free of footprints. It doesn't mind at all if you get to the other side of the yard as long as you don't get any footprints on it and ruin the way the fresh snow looks. You can fly across the yard, walk around it, or whatever you want, just don't mess up the way it looks.

Some people get away with not varying their anchor text, the majority of the others don't. I strongly doubt that his ranking drop after he started varying his anchor text and even if he did, it's unlikely to be related to the anchor text.

Seriously? Common sense buddy. You really think having the same anchor text 90% of the time looks at all natural. Look at how people link out. Every link usually has a different anchor text. The best results I have is when about 30% have the exact anchor text I want to rank for, another 30% have varied anchor text with my keyword included so if the keyword is "life insurance" i'll anchor with "life insurance prices" or "information on life insurance". Then the last 40% will be related text, the URL, click here ect...

SEO is about common sense and looking natural. Building 90% of your links with the same anchor text is like screaming to Google "I AM TRYING TO CHEAT YOU!"