I'll start by saying that this is not a case study. There is a WebmasterWorld thread that asks, how long does it take to re-obtain the old rankings one had, prior to receiving a Google penalty, and then Google reincluding the site after a reinclusion request.
We already saw that a reinclusion request can take anywhere from a few days to a few years, based on our poll. But after you finally see your site is reincluded or that the penalty is removed, how long will it take for your site to regain the rankings it had for those competitive keywords?
The quick answer is, "it depends." It depends on the penalty, it depends on what you removed to get out of the penalty, it depends on what you changed on your site.
If you removed a ton of links and those links were the reason you ranked number one for "seo company" (inside joke) then, I assume when you come out of the penalty, you won't be on the first page for seo company anymore. Why? Cause most of those links that got you that top ranking in the first place, hurt you and you no longer have them to help you.
There is one member who offers a bold statement, that I will quote here, but won't confirm. And I quote:
(1) If your site has been tanked for the first time: -- your site will get back with the same ranking if you play Sherlock Holmes for a few months in order to find out what happened.
(2) If your site has been tanked for the second time: -- your site will come back with about 20%-30% of traffic it had before if you again play Sherlock Holmes for a few months in order to find out what happened. I don't know if it can recover completely again.
(3) If your site tanks a third time: -- close down the domain and get a new one.
Again, it depends on tons of factors.
Forum discussion at WebmasterWorld.