minstrel
@eavsey: "do we need to drop our paid links? Do we need to get ourselves removed from bidding directories?"
Cutts has told you what’s acceptable practice - charge a one-time fee for review of the site - ensure that there is quality control and that not any old site that pays gets listed - don’t participate with other directory owners in the massive link exchange schemes that have been going on - don’t buy links to your directory. This is no mystery. The people that have been hit have been violating one or more or all of those guidelines, some by open admission. As for all these crap bidding directories, whoever thought up that bright idea had to be impaired - you might just as well report yourself to the paid links spam report service if you run one.
@eavsey: "I have put a lot of hard work into making sure that the overall quality of listed sites is very high and making sure that I have 100% unique content"
How have you done that? From what I see in the paid directory sector, none of them have 100% unique content. Most people who submit to one also submit to others.
@eavsey: "I also have a lot of unpaid links including links from authority sites."
Do you also have a lot if paid links? And how do you define and identify "authority sites"? There is a great deal of mythology, superstitious thinking, and misinformation propagated about authority sites.
Story: Google Manually Penalizing Directories