only time can tell if it is a google dance.

You said you did heavy link building? Did you do this naturally or did you pay someone to do bulk back linking?

Yes, I think its google dance. You should not do heavy link building never. Natural link building is the key thing to hold your ranking on SERP.

I am suggesting you to build natural links from now and while building links don't think about the site's PR, just focus your link's quality.

Building backlinks all at once may be the reason for this. Creating a natural links profile will always keep your position in serp

I would suggest you to stop building links for some time.You website may be effected by Penguin update.
Just check various parameters in Google analytics and if this is the condition, then 301 redirect won't help you much..
You have to follow different approach.

I hear that just doing this entire process a bit slower helps. Do you think that is the case? I think it looks more natural then.

You should observe some of the following things in your linkbuilding rounting
1. Do you ever used blog networks?
2. Do you have too many affiliate links in your article?
3. Do you have any copied content?
3. Have you ever used any low quality links?

These are some of the reasons for being penalized by Google.

it is really Google dance. google panda 3.9 refresh

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heavy links maybe considered as cheating by Google.

Due to heavy link building your website is effected . Remove all unnecessary links pointing to your site to avoid further penalties

The Google dance is a term that was used years ago to describe the fluctuations in ranks that were caused when about every month or so Google would re-index the WWW As different data centers were updated with the new information results would vary based on which data center your query was directed to.

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No, the 'dance' lasts a few days, not several months.

Things that may have caused it:
1) Building low quality backlinks in an un-natural way.
2) You made a change to your website that Google didn't like.
3) You got b***h slapped by the Penguin update. Over optimized website?

The google dance lasts days, maybe weeks. If the problem comes after 5 months, it has other origins.

It is like this for 5 weeks (not 5 months)

I bought blog reviews. So all the links are quality. They moved all my keywords to top in 3 days.

After it entered to dance(?), I continued to buy links for 4 weeks. And on the 5th week, i decreased its amount near to 1 review/day. And i believe this caused -at least- my inner pages to pop up on 3th-4th page.

I don't think that it is penguin.
My site entered to dance or something on February 2012. I was on second page for all my keywords.
It came back after 3 months -exactly on 29 May 2012- with all my keywords on first page.

I'm 99% sure that this is dance, because it happened me at past. And all of took 3 months to come back. So i wanted to learn if doing 301 will stop the dance, because i can't wait another 1,5 month.

how old is your domain ? Google dance is mostly happen for two reason, when Google indexing links (if your site is not establish well and has PR 0) and when Google changing their algorithm...

google dance, i belive have it. i think you can stop seo and relax.

My seo guy says this happens when building links to fast and/ or something called sandboxed as well?

The name "Google Dance" has often been used to describe the index update of the Google search engine. Google's index update occurred on average once per month. During an index update there was significant movement in search results and Google showed new backward links for pages.

Actually I am having same problem with two of my sites. Suddenly they are going out of SERP and after one or two days they are coming on first page. But I don't stop link building. I am building links slower than the past. Now they are permanent in first page. I am targeting to get them in top 5.

Well, just slow down the link building process and do the quality link building like in the forums, blogs and articles.

No that's not Google Dance .Its due to generation of high link building , unnecessarily.Over optimization of link is looking their and new filter filtered your website .So be with Quality link building From Now .You will achieved ranking back n\but no need to aggressive with work .

According to me your main page was penalized by Google so your inner pages get preference. Remove unnecessary links pointing to your website in order to remove this penalty.

According to me when Google make changes in its database and then ranking of all website keywords change for 2-3 days then i think this process is called Google Dance.

Google dance term refers keywords ranks fluctuations in SERPs.Initially it was happens once in month but now google update certain percentage of index every night.

Can you tell us what your website address is? Would much it much easier rather than us just speculating.

Your link Building always seems to be manual. you should build limited links if you want to stay in top results.