In short, he received a manual action on his site for outbound links that sell PageRank or participate in link schemes. Here is the notification and note, it impacted the rankings of his whole site:
Google's Matt Cutts actually responded to the complaint on Twitter saying the manual action "was point on" because of the off topic guest post he accepted that passed PageRank. Here is Matt's tweet:
@DocSheldon what "Best Practices For Hispanic Social Networking" has to do with an SEO copywriting blog? Manual webspam notice was on point.— Matt Cutts (@mattcutts) March 24, 2014
Now, Doc responds that (1) his blog is about SEO and social and the blog post is on topic and (2) even if it wasn't, if it is one post, why does it impact the whole site?
@mattcutts My blog is about SEO, marketing, social media, web dev.... I'd say it has everything to do - or I wouldn't have run it— DocSheldon (@DocSheldon) March 25, 2014
@mattcutts So we can take this to mean that just that one link was the justification for a sitewide penalty? THAT sure sends a message! ;)— DocSheldon (@DocSheldon) March 25, 2014
If you read the guest post, here is a link to it on web archive, because I assume he will remove it soon, you will notice that it isn't the best quality post.
Doc himself admits to that saying:
To also be fair, you're right. I probably shouldn't have accepted it. It wasn't totally without value, but it didn't bring much to the table.
However, it wasn't subjected to a Panda penalty. ;)
Well, that wasn't a Panda penalty, it was a manual action but yea, I am glad you said you should not have accepted it.
It makes you think, you must must be careful about the quality of the guest posts you allow on your site. I rarely ever allow anyone but myself to post here anymore. That doesn't mean you can't allow contributors, the biggest publishers do, Forbes, Wall Street Journal, Search Engine Land and so on. But the amount of editing, screening and reviews that are put into those "guest posts" are high. It seems like Doc let one slip through and it ended up hurting him.
That being said, Google probably was too harsh on this one but we should all learn from this. Yes, you should be worried, you should go back on all your guest contributions and make sure they won't end up hurting you. Worry and learn from other's mistakes, even if they didn't think it would be a mistake because Google has gone crazy over links and their war on links.