Google's Gary Illyes responded in short to a Google Panda question, asking if having 404ed pages have an impact on the overall Google Panda algorithm. Gary said on Twitter, "nope," it does not.
Here is the set of tweets:
The truth is, Gary answered this assuming the webmaster meant a negative impact. Does having 404s trigger Panda in a bad way? The obvious answer to that is no.
But many sites hit by Panda do try to 404 and remove a ton of pages on their site to recover from a Panda penalty.
Google has recommended removing content from sites impacted by Panda.
Forum discussion at Twitter.