Hey Rod - thanks a ton for jumping in. I totally agree with you that diversity is required and that press releases are most valuable when they reach their target and achieve broader press and distribution than merely the PR sites themselves.

I just mean the uniquely named portion of the subdomain, e.g. the "xyz" in xyz.domainname.com

All the testing, research and examples I've seen in the past few years (and even the past few months) strongly suggest that the same principles still hold true.

Subdomains SOMETIMES inherit and pass link/trust/quality/ranking metrics between one another

Subfolders ALWAYS inherit and pass link/trust/quality/ranking metrics across the same subdomain

Thus, having a single subdomain (even just domainname.tld with no subdomain extension) with all of your content is absolutely ideal from an SEO perspective. It's also more usable and brandable, too IMO.

Thanks dude! If I make it to Vermont, I might look you up

I've seen a bunch of these and weirdly, the 301s do seem to (often) remove the penalty in cases where it's a true penalty. However, what you're describing sounds like it could just be a negation of the value of many external links (which is much more common than the actual "penalty" that downgrades you).

If that's the case, 301'ing likely won't do much positive or negative - it will pass on the "juice" that Google's still counting and thinks is legit, but probably not the devalued juice (though, to be honest, I've seen a few times when it has and black hats sometimes do use this strategy - constantly re-pointing stuff as it gets hit). This certainly isn't recommended, as eventually, you will have that "burnt-to-the-ground" effect. If you're looking to go clean and white hat on a different domain, and want to take some of the content and link efforts you have in the penalized site, that's certainly a way to go.