I didn’t think this was possible and I wasn’t convinced negative SEO was made possible by the latest Google algo changes (and the hit on the blog networks) but looks like there’s more and more proof it out there.
The proof isn’t definitive as there’s no telling exactly of what else was going on with that site at the same time or before, but it’s a pretty good case of the possibility of negative SEO.
The reason I’m still on the fence on this issue is because I’ve received these unnatural links messages from Google too but they have only affected the rankings that were a direct result of those links. In other words, I’ve only seen a discounting effect rather than a penalizing one. I think it is also possible that a sudden blast of links can force a re-evaluation of all existing links and therefore cause discounting of any of those who are deemed as unnatural by Google.
Nonetheless, it will be interesting to see how this issue develops further.