Is your website bleeding PR?

Ok so I have to head to work in a few minutes but I had just had to get this out there as it seemed to be quite a huge AH-HA moment for me, at least I hope to find out from the more experienced guys here what they think.

So here is the case:

I had an affiliate site that has about 30 product reviews on it so it is about 36 pages deep. I started this site about 9 months ago and from that time have done Back Linking like a champ. The thing is no matter how much good back linking I did I always seemed to never go up in PR, nor raise past a certain bar in the SERPS. (Page 1 I am there but not #1 yet)

Anyways I just haven't been able to get my head around what might cause such lackluster PR and rankings (I know PR isn't "that important" but let me explain)

So a friend and I set up a blog a month ago, it is an adsense site. So anyways after doing about a months worth of Back Linking the sites main page and 2-3 seperate pages hit a PR of 5 and 4. So notice my shock when a newer site then mine seems to be rising in a FAR more competative niche with a much higher PR in less time, when honestly this new site had probably less on page optimizaion and 1/10th of the backlinks.

So anyways here is what I think may be my issue with the first site. Every single one of my review pages has about 5-7 outbound links pointing to my vendor. Meaning for the last 9 months I have been bleeding PR to all my vendors, because I didn't know about using rel="nofollow"

I dealth with nofollow everyday but I did not once suspect my affiliate site was just dumping its PR down the drain to my vendors. It made sense though seeing as my adsense site has like 1-2 outbound links, and my affiliate site when multiplied out probably had 150-160 outbound links.

I have since that realization started to modify all my links that go outside my affilaite page to nofollow. So I have a couple of questions.

1.) Will google update its view on my links now that they are nofollow and slowly start to take away all the Backlinks I have been providing?

2.) Do you think this really could be the reason, its the only thing I could think of that tends to make sense, and I sort of know how google and PR works.

3.) On my affiliate site I use the php redirect aka www.example/recommends/product-name.php since I am adding the nofollow to the page that links to my redirect will that really even matter? (Oh and I just started using these redirects about 2 days ago, and added the nofollow today)

4.) Hopefully this will save some newbies like myself from bleeding PR on a new site while you wonder how other sites with no back links some how magically rank higher and have a higher PR then you.

Well hope this is actually something, feel free to let me know if it really doesn't matter though I really think I am sure this is why my site has done so poorly.

Anyways Cheers and hope some one finds some useful information here,
Scott

P.S. Thanks for answering any of my queistions if you can, I plan to do a lot of work when I get home from the 9-5