SFGate sold links via text-link-ads.com
SFGate.com was an avid seller of text links via text-link-ads.com and still does. The "sponsored ads" could be found at the very bottom of many section pages on sfgate.com
The big question is, if Google drops PageRank of highly important new organizations like WashPost, it should imply that it will become much harder to find relevant news stories and commentary from these organizations via Google. It happens that tons of majjor US newspapers sold links via text-link-ads, Washington Times is there, Chicago Sun Times, and quite a few TV stations.
For example, if you look at the bottom of foxnews.com, you'll find an array of 10 little ads, each of them includes a text-link to the site (which would qualify as a paid link for the purposes of Google's wrath, they're live HTML links without nofollow).
I suspect that if Google drops PageRank for real (affective search results) rather than only for demonstrative purposes, it will be a bigger loss for Google than for all of the sites involved. Google will stop returning relevant news content on search queries, instead serving up rehash of the same stories form Johnny blogger who doesn't sell links yet. One of the main reasons such serious news organizations took the gamble on selling paid links in the first place, is that their brands and websites are well known and get a lot of direct traffic, Google or not.
This may be a tacit admission on Google's part that they've been unable to come up with reliable algorithms to filter out paid links without going on a manual witch-hunt after link-selling sites. What the 200 Billion company needs now, is a lot of free help from webmasters to protect its turf in selling paid ads in search results.