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Very provocative idea, Matt-Antonino, and that's certainly a creative option.  What about if I just pinged all the old 301 links to the old url?

They're not identical, and I notice many directories are set-up like this.  Two individual users with different interests would find unique information from both of these samples.  The only issue is how your competition has setup their page.  For instance, if someone is just targeting Phoenix, and really goes to town with unique information and links, that may rank better because they may be views as more of an authority on the subject.

You should try to mirror the 301's to the duplicates on the main site.  So in answer to your first question, the duplicate blog index page should go to main/blog, and everything else should go to the new location on the main site.  Anything without landing pages on the new site, should redirect to main/blog.

Thanks William.  My concern is that too many of the links from the old domain were over optimized and contained too many keywords associated to the field I'm in, and are doing more harm than good.  I have mixed filling about the disavow tool at this point because it sound too good to be true.  I'm kind of suspicious G would let me choose the link I want to loose, but at the same time allow me to keep the ones I want.

Safest bet is to do internal linking from as many pages as possible, that are related to the keyword.  Depending on the keyword, external linking may actually hurt your SEO if you over do it.

A relatively new site I'm working on has been hit really hard by Panda, due to over optimization of 301 external links which include exact keyword phrases, from an old site.  Prior to the Panda update, all of these 301 redirects worked like a charm, but now all of these 301's from the old url are killing the new site, because all the hyper-text links include exact keyword matches.  A couple weeks ago, I took the old site completely down, and removed the htaccess file, removing the 301's and in effect breaking all of these bad links.  Consequently, if one were to type this old url, you'd be directed to the domain registrar, and not redirected to the new site.  My hope is to eliminate most of the bad links, that are mostly on spammy sites, that aren't worth linking to.  My thought is these links would eventually disappear from G.

My concern is that this might not work, because G won't re-index these links, because once they're indexed by G, they'll be there forever.  My fear is causing me to conclude I should hedge my bets, and just disavow these sites using the disavow tool in WMT.  IMO, the disavow tool is an action of last resort, because I don't want to call attention to myself, since this site doesn't have a manual penalty inflected on it.  Any opinions or advise would be greatly appreciated.

Yes, 301...Thank You!  I'm trying to address bad 301 links being sent from the old url, to the new url.

A relatively new site I'm working on has been hit really hard by Panda, due to over optimization of 301 external links which include exact keyword phrases, from an old site.  Prior to the Panda update, all of these 301 redirects worked like a charm, but now all of these 301's from the old url are killing the new site, because all the hyper-text links include exact keyword matches.  A couple weeks ago, I took the old site completely down, and removed the htaccess file, removing the 301's and in effect breaking all of these bad links.  Consequently, if one were to type this old url, you'd be directed to the domain registrar, and not redirected to the new site.  My hope is to eliminate most of the bad links, that are mostly on spammy sites, that aren't worth linking to.  My thought is these links would eventually disappear from G.

My concern is that this might not work, because G won't re-index these links, because once they're indexed by G, they'll be there forever.  My fear is causing me to conclude I should hedge my bets, and just disavow these sites using the disavow tool in WMT.  IMO, the disavow tool is an action of last resort, because I don't want to call attention to myself, since this site doesn't have a manual penalty inflected on it.  Any opinions or advise would be greatly appreciated.