Google Dance? Please help explain SERP changes

Hi all I am new to this site and would firstly like to say hello and that I am looking forward to gaining a lot of information. I think I am getting somewhere with my website but am looking to learn more information than I think I can give at the moment. All advice is greatly recieved as I have never experienced a lot of the issues that I am coming up with.

My website for Retro Gaming and Console Repairswas appearing number one in SERP's for locally targeted keyword campaigns. All of a sudden my keyword backlinking campaigns started to kick in and my SERP's are all over the place. Still appearing in some areas and just completely gone in others. Why is this happening and how do I get back to where I was?

I have noticed that www2. and www3. servers are down for the UK and it seems weird that my webmasters tools has just gone crazy and all this is happening. Am I going to come back stronger than ever as some people predicted or am I being sandboxed?

HELP ME PLEASE! Appearing number 1 in SERP's was helping me no end, as I offer repairs at a much lower rate than any of my local competitors!

Thank you,
James @NRGUK