First question I have is why did you delete WMT?

Yes, you are way off. It's a coincidence.

@crete - because I saw some peculiarities. I actually wanted to delete it an reinstate after a week or so. As example. On one site I have 250 posts/pages. WP. No tags used and all categories are non-indexed. Yet in WMT I see >1600 pages index. To me - weird. Thought error and hence decision.

Then - any ideas? I see NO reason for this major jumping in SERPs across the board.... and before you ask - NO - my domain is NOT and EMD. Far from.

@wolfmii - strongly doubt it. +/-50 inner pages tank overnight. I'm not taking about few places jumps up/down - I'm quite used to that. I'm talking #3 to oblivion (worst case). One would doubt that I was a victim to P&P but I really can't see how that can be - unless I the "guy being hit by the truck while walking on the pavement" - IYKWIM

Ok, here is my viewpoint. Full disclaimer i have never had this happen to me so i don't know how informed this is, so take it with a pinch of salt.

This may not be a coincidence. For example, in the past i changed my blog theme.. and overnight all of my rankings tanked on a site. This was 100+ pages and losing 300 a day traffic. I actually thought, ok its just a dance and it will come back. It didnt.

I waited 2 weeks, then changed the layout back. My rankings came back after 3-4 days.

Now what does this have to do with OPs case. Not much. But Google can do some strange shit sometimes. OP i would re-verify with webmaster tools.

That being said, it could well be a coincidence and your site has got a penalty for some reason. Hope that helps, but there isnt really much i can say right now. I dont have enough info.

Question, how quickly after you removed WMT did your site tank?

@ Make Money Ninja - thanks. It's a good thought. I actually changed theme several times without any serp hits.

My avg. traffic is 500 per day UV so lets see impact in terms of traffic over next few days.

I will definitely reinstate WMT but will swallow some ice for a few days and monitor.

To answer your question. 1) main domain saw first impact -20 positions or so without few hours, another -80 positions without 24 hours. Impacted inner pages - now about 50 - started tanking within 24 hours and real bad today - 48 hours or so after

You asked:

"I'm seriously thinking that I'm being penalized for deleting WMT. Is this totally off?"

I answered:

"Yes, you are way off. It's a coincidence."

You replied:

"@wolfmii - strongly doubt it."

Like I said. It sounds like you've already made up your mind so I'm not sure what else you want me to say. What I will tell you is that I own many sites. Some use WMT and others do not. There is no difference in ranking among them based on anything related to WMT.