I doubt there's a filter against xxx, but that doesn't mean there isn't something in the algos that checks for a spammy link profile more aggressively if the xxx is there.
I ran through the first 5 pages of links in Open Site Explorer, and their highest authority links mainly contain the branded keyword phrase "xxx church". Could use some diversity in anchor text. Just because Penguin hit for exact match anchor text for spammy links (from spammy sites and tactics), it doesn't mean you can't use "Check out this porn addiction recovery site if you're having issues with porn in your house." and link to the site with the underlined text.
There may be some more questions to ask. What are their link building efforts?
A number of pages from http://blog.internetsafety.com with incoming links no longer resolve (404 not found). There are lots of links that actually do look Penguin bait.
It could be link diversity. It could be low quality links. It could be tons of links coming from pages that are now resolving as 404s.
Sorry the news isn't great, but I really don't think it's the domain name that is the problem.