Worse instead of better?

So I cleaned up my site, codewise, hired a programmer to fix errors. I reduced the page's file size by about 1/4. {It was way overlarge before--still quite large but smaller.} My members say the site loads faster than ever. I reduced clutter on the site and removed aspects of it that were presenting as keywords I didn't want to rank for {like "posts" "desks" and "sub boards", which appeared as elements since it's a forum} removed the word "index" from my main page, so it's just my site's name there now. I re-ran a keyword check from several different "seo grading" sites to check for accuracy etc. I am getting way better marks now by all of them. Not too dense and not too sparse and looks natural, since the sentences were pretty much unchanged, only the extraneous text was largely removed leaving the content to dominate more.

So Google now removed me from 3rd place for my main keyword and stuck me down at 8th.

My links are the same.

Just checked all my major links and link sources {reciprocals, one-ways, and forums that I post with my sig links} All up and normal. And none of them devalued or anything as far as I could tell. No nofollows added {I always had a few}, no sites de-indexed, not that I link in "Bad Neighbourhoods" anyway. I don't use Xrumer or any other automated software. Every link I place I do it manually, and I don't spam. Even if the links aren't all perfect, most of them are on relevant sites, since that's where I tend to hang out most; and they sure weren't any worse last week, when I was up at #3. And they are diverse--videos, blogs, forums, social bookmarks, twitter, facebook, and a couple "plain old websites."

I haev SEOQuake running so it doesn't take me long to check all this every few days.

What is ironic is that this past week has been the week I did more on-site optimisation than I have ever done. Not only did the SEO grading sites definitely like it more this way but so do my members. {So obviously, after all the work I did to persuade them that this is better, now they actually do like it better there's no way I could put them through changing it back!}

I don't know what I'm really asking for, I guess an explanation for what I did wrong. It's the site in my signature. The keyword is "warrior cats rpg" {and "warrior cats" but we rank even lower for that now} We were in spot #3 only 2 days ago.

Anyone who can provide me with some helpful advice, I would be so grateful.