I just dropped from the 3rd page to beyond 1000?

Seems like you're not doing anything to keep it ranking to me. Hard to say.

Is it a single page or did your whole site get penalized?

Its normal; well atleast I think it is.
Had one of my sites drop off completly for 2 weeks ! Then it suddenly came back higher than it was before, I even gave up on it entirely thinking it had been penalized.

Just keep building links and posting content, google will bring it back

Sounds like you def need to drop more links broski.

Would be interesting to know if the ranking came back?

As long as your site is still indexed, it should be fine. A few of my sites had this sort of thing happen too. They were ranking well, then one day they suddenly disappear off the radar.

Then a few weeks later, they are back again. Guess just need a bit of patience and keep working. Good luck.

It happens to new websites, just keep the backlinking process and in a few weeks it will appear.

One of my websites that happen. One day all my pages were indexed and ranking then in the other they all dissapeared. After that I spent 2 weeks doing backlinks, when it appear my home page was ranked 3rd.

This is quite common in my experience. A number of my sites started out ok, gained traction but for some reason seemed to fall of a cliff! It usually took me 2-3 weeks to get back (I just left it and didn't build links) but all of them came back stronger.

Try not to be spooked and concentrate on your long term strategy and writing content to feed BMR and you should have some strong foundations when you emerge on the other side.

Ok, write a few articles/posts on your website so that it your website seems regularly updated.
then spin those articles and submit to article directories after a week.
write a few press releases and distribute them .
Use social media websites like FACEBOOK, stubleupon,digg, as well as free document sharing websites like scribd.
Create lens on squidoo.
create a profile on identiti.ca
Do some social bookmarking.
If you follow these, You will have better rankings then before!!
Google just rolled out their update on 28th!!

Don't panic this happens to me all the time. What I do is keep writing quality content for my site, building links and my website usually comes back better than before. My website just came back on the first page of Google for two keywords after over a month and now it's gone again.

Put on your dancin' shoes.

You're probably going through the dreaded Google dance. Just keep building backlinks and you'll start to stabilize.

I'd say it's way too early to worry about your site jumping around.
I had a site last year that was still moving around after 7 months.
Finally it settled down and is now currently sitting at #3 on page one.

Just keep doing what you're doing and work hard.

This happened to me twice with my new sites. I had one site drop off the face of google for about a week and a half, but a random subpage ranked for page 4 for the keyword that the homepage was targeting. Long story short it came back, but I got hit for having ads above the fold. This was a sorta competitive keyword, but I'm back slightly lower then I was before it started.

Currently, I have a amazon review site that was 3rd for a lot of keywords (very low competitive words). I was getting good traffic though, and it suddenly disappeared aswell. I'm sure that it is likely going through the same thing, but I cant help think it got hit for something to. I have a lot of good articles, but my 45 product review pages are only 300-500 words long with a cloaked amazon link.

It's only natural to think that you got hit for something when your site might just be doing something normal. My advise is that you fix what is bugging you, or add some high quality articles. It will give you a much better site in the long run, and at the very least it will make you feel better.