2. Click Install, close page
3. Open each of the links below in a new tab, click block on the first result
4. Win.
http://www.google.com/search?q=Mahalo
http://www.google.com/search?q=ehow
http://www.google.com/search?q=experts-exchange
http://www.google.com/search?q=livestrong.com
http://www.google.com/search?q=answerbag
http://www.google.com/search?q=bills.com
http://www.google.com/search?q=chacha.com
http://www.google.com/search?q=associated+content
http://www.google.com/search?q=efreedom
http://www.google.com/search?q=questionhub
http://www.google.com/search?q=squidoo.com
http://www.google.com/search?q=about.com
http://www.google.com/search?q=yellowpages.com
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Edits: fixed formatting, added suggestions
This method is fine. The actual data sent to Google when you block a domain does not contain the search query (or the referrer).
This is what gets sent when you block a domain:
http://www.google.com/gen_204?atyp=i&oi=site_blocker&ct=addToBlocklist&ei=[CSRF-cookie]&cad=mattcutts.com
and unblock: http://www.google.com/gen_204?atyp=i&oi=site_blocker&ct=deleteFromBlocklist&ei=undefined&cad=mattcutts.com
(Interestingly the CSRF token is broken when unblocking.)