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:
I made an assumption that some good internal linking using the keyword in the anchor text in the same site would push the rankings up to page 1In effect i used the "Blogroll" style links in WordPress so i had a top 10 searched area listing these 10 keyword rich links on the right column of EVERY page
Since then my traffic overall on the site has gone down. Its almost a month since this change.
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Forum discussion at WebmasterWorld.