I set up a completely new site on a domain that had been forwarded for a year. The domain generated lots of traffic for about 2 weeks, then Google promptly dumped it. No sandbox, just wiped it out. I sent a request for reinclusion a while back but don't expect to hear back from them.
So I don't know what happened but it almost looks like a ban to me - even though it is a site that is not violating any terms.
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