I spent 3 months rearranging my site. My site took a major nose dive. I added many pages of "organic" links going back to the home page as well as moving all my link partners to a linkback site so I have no link outs. I fixed countless spelling errors. However, to be fair, I don't believe Google Spidered all the pages or even most of the pages that I did my upgrades on. The thing I did that I think is the culpert, is that I linked many of the new pages to the home page and I used a lot of key words that I was not previously optimised for hoping to pick up my wieght in places that I was a little weak. Its hard to believe that twenty links going from my home page to the internal pages with optimised content would send my site realing downward by deluting the keywards. But it is the only answer that I can come up with. Anybody with any ideas?

I've heard that websites with only link ins will not do as well as a site with link ins and link outs. Take this with a grain of salt though, I'm not sure of the comments validity.

Could you post a link to the site so we can take a look? hard to know anything without knowing the site in question.

I do think that only having incoming links will look unnatural and might have thrown a red flag. If the majority of your links are reciprocal links that you've simply moved your outbound links to another site I don't think it's too hard for Google to figure out what's going on and it could probably throw up another red flag. Does sound kind of link farmish the way it's set up.

Is the nose dive a drop in PR. If so it might not be a big deal. Aside from the fact that toolbar PR is pretty much meaningless to begin with it also looks like there are a lot of wierd things with the latest update. I've seen a lot of toolbar PR changes that don't make much sense.

Keep in mind they are also always doing algorythm changes. There might have been one that negatively effected your site.