Dan, why are asking around on here and to Google about whether negative SEO exists?
Its obvious. You know the answer. Absolutely it does. Your site is case in point.
Negative SEO is alive and well. I know people selling packages as we speak. And taking many orders.
Google doesn't just discount for links. They penalize for them. And as long as they penalize for them, webmasters can hurt each other. Most of the people on here saying otherwise are "employees" for companies, not building sites and making a living doing it for themselves.
Matt Cutts is a PR guy. At some point it comes down to perception. But the reality is, Google penalizes for links. And almost none is immune.