Strange Penalization. What to do now?

How many days was the site down?

I believe the drop is cause by your backlinks or over on-page optimization. Somewhat I can relate to your situation since my client also did experience a drop in Google without any message on Google webmasters tools if we are being penalized or something.

Up until now I still can't figure out the cause of the drop in rankings on Google but I believe it's due to overwhelming Dofollow backlinks over nofollow ones. Google algo think we tried to manipulate our rankings and we actually did since we were ranking for like 20 keywords on the first page from highly competitive keywords down to long tailed almost no competition.

I tried for 2 months to recover my client's ranking on big G to no accord so we decided to focus our efforts on ranking at B and Y and it did payed well. Since I've manage my client's site's trust and brand to be my priority since the beginning it was easy to recover my client's sales.

My personal suggestion to you is to try and figure out the cause from the bottom of everything you did to rank your site well, then try your best to recover from the drop in G rankings, if you think you're not making any progress try to rank on B and Y instead and let go of G. Finally, when big G is really objecting any of your site's post/pages to rank create a dummy site and work out on it and do your thing to rank it.

Forgot to tell.. My client's dummy site is doing well in G on most of my client's main keywords. Good luck to your campaigns or your future plans.

Have you checked if your backlinks are mainly still dofollow? Perhaps the webmasters changed the links to nofollow. That is one possibility of why your rankings may have dropped.

My website plummeted in rankings after the huge Hostgator outage. It's actually ridiculous that Google screwed our rankings over such a massive outage that was out of our control. Sure we could have been on a different host but considering EIG owns a majority of the major hosts and all were down that day is irritating. You'd think that Google would have a prevention in place to reduce a sites ranking as drastically for less than 24 hours down time.

I'm curious if this has happened to anyone else or if it is a similar story for the OP.

Well, I think the down time might be the cause behind the drop in rankings, I think you should wait week before reaching into any decision. Load time and the accessibility of the site may affect your ranking, I would say fix it up and wait a week if the problem is because of the down time your site will move up in the ranking. Otherwise like others suggest start looking at your backlinks.

The site dropped like 1 month ago!

Page speed and downtime may be a serious fact to lose rankings , of course that not means that you will lost your rankings for ever .If you fixed the problem you will get your rankings back.
Of course server change many times cause problems to rankings too .

Sounds like you got hit with the over use of anchor text backlinks penalty. What is your percentage of anchor text backlinks for the particular keywords? I got hit a couple times and you get no warning and inner pages out rank the homepage.

Competitors are the same. Also it's not possible that first 8 pages of google have done link building better then me in few months.. come on..

Main penalized anchortext is 7,4%