We have a medium size site that lost more than 50% of its traffic in July 2013 just before the Panda rollout. After working with a SEO agency, we were advised to clean up various items, one of them being that the 10k+ urls were all mixed case (i.e. www.example.com/Blue-Widget). A 301 redirect was set up thereafter forcing all these urls to go to a lowercase version (i.e. www.example.com/blue-widget). In addition, there was a canonical tag placed on all of these pages in case any parameters or other characters were incorporated into a url. I thought this was a good set up, but when running a SEO audit through a third party tool, it shows me the massive amount of 301 redirects. And, now I wonder if there should only be a canonical without the redirect or if its okay to have tens of thousands 301 redirects on the site. We have not recovered yet from the traffic loss yet and we are wondering if its really more of a technical problem than a Google penalty. Guidance and advise from those experienced in the industry is appreciated.