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I'm pretty sure that the penalty is real.
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You don't need a stamp of approval from Dave - he doesn't work at Google and neither do I, so what do we know? Just because the problem isn't impacting any of our sites doesn't mean the problem doesn't exist. I wouldn't assume it exists, either.
Let's talk facts - opinions on whether a penalty is real or myth don't solve problems.
Your site doesn't have to be spamming to show up in the last page of results. Grandmascrotum's site is far from spammy but it nevertheless ranks 900+ for several related terms.
All I can suggest at this point is to get rid of any negative signals - cleaning up questionable outbound links (e.g. linktrades with low-quality hubs), nofollowing aff links, reducing duplicate content, fixing 404s, eliminating canonical issues, reducing keyword frequency, etc.
Filing a re-inclusion request, after all that's done, is an option. You are allowed to file one not only when a site is banned but also when a site is penalized. Whether you're just ranked poorly or penalized is up to you to decide.
The best cure for any site IMO is to gain links from authoritative sites with your target keywords in anchor text as part of an article - that's more powerful than blogroll links, thousands of cheap recips, etc, but in adult, as we all know, "quality links" are hard to come by.