There are various kind of penalties by Google, say your site is pushed to very last page, or site is pushed to 33-34 positions or your site is completely removed from listings. What kind of penalty you have? I think, if the site is still listing on Google for your keyword, you can bring back by getting some good backlinks and make sure that you are following Google rules (take care of your OnSite setup - make changes to your site content or etc)....

In this case, I had some page 1-2 rankings. After the penalty, everything was page 5-7.

If you think can help me with this, please message me for more details. I can pay a good price.

it might be due to the panda update. is all your website content unique?

Yes it might be Panda related. It did not happen on an official panda update day though. I think instead that panda update triggered my sites for a manual review.

The sites were lacking in unique content previously. I have tried to address that since. The problem is that the advertiser requires specific text on any site that promotes their products. Other sites still rank well using that text.

Hopefully it is just a matter of getting enough quality backlinks.

Only 1 way to recover things.

-Look over all your sites and their earnings history. Decide which ones are worth saving/recovering.
-Add all your sites to Webmaster Tools (if you want to stay ranked, you shouldn't be worried about doing this).
-File re-consideration requests for all the sites you think have been penalized. Most likely, Google will automatically respond that your sites have not been subject to manual spam action.
-If that is the case, there is hope. Rewrite your content or hire someone to do it for you. Make your content BETTER than you what see in the Top 5. If they have 1,000 word articles, you need to do the same. And of course, build Quality Backlinks and make it look as natural as possible by being consistent, and using a wide variety of anchor text.
-If Google says there WAS a manual spam action, then you need to tell them what you have done to correct the problem, to be re-included in their results.

I've been through a few manual penalties and each time it only affected the site in question and not all my sites in my Webmastertools account. Here's some replies that worked to have manual spam actions removed: (just examples)

-Dear Google, I've re-written all my content and redesigned my site to better comply with your Quality Guidelines.

-Dear Google, I hired an SEO company and I now realized they may have done things contrary to your Quality guidelines. I have removed as many of the unnaturally created links as I can and have contacted site owners to get the others removed which i do not have control of.

-Dear Google, I am certain that a inquiring buyer of my site has been doing things to negatively affect my site, after i refused to sell it to him. (Give a name and email address, any name and email address). Can you look into this?

Has anyone actually successfully overcome this kind of penalty via google reconsideration requests? I had tried that for one site and they would only send me generic responses.

In the google webmaster tools, you can submit your site for reconsideration.