A WebmasterWorld thread has one SEO/Webmaster claiming his ranking for his primary keywords died after using too many internal links in an effort to boost those keyword rankings.
In short, he noticed he was ranking semi-well for a number of keywords. To boost that ranking a bit, he decided to add a blogroll like navigation to his site and place those keywords in anchor text to the internal destination pages. He said, it backfired and now his keyword rankings for those queries have dropped.
He said:
Do you think over linking internally can hurt you? Take our poll:
Can You “Over Link” Your Internal Links?survey software
Forum discussion at WebmasterWorld.