bostonseo, i have had a similar experience to you, but the decline started at the beginning of feb.
i have a large account that spans many verticals. the decline in adwords traffic on the search network has been 28.8% from the peak at the beginning of feb. the decline on the content network has been 20.6%
about 1/4 of our adwords traffic comes from content, and the rest from the search network.
i have talked to my adwords rep numerous times about this, but we have come up with nothing conclusive.
after extensive testing, my best guess at the moment, is that the decline is caused by an explosion in competition from the adwords-to-adsense-arbitrage and adwords-to-ypn-arbitrage websites. as most of you know, adwords is allowing people to advertise on pages with virtually NO content. with no barrier to entry (other than some seed money) and with the adwords api, they can cover virtually every vertical almost overnight.
currently, the 3rd biggest gainer on alexa's mover's and shakers is one such site. i know that alexa is not accurate, but this is certainly indicative of something (something terrifying in this case).
i sincerely hope that adwords is going to stop allowing this practice. actually, i am quite confident that adwords is going to start banning these accounts - i just hope they start much sooner than later.
arbitrage is one thing, but this new breed of websites are contributing absolutely nothing to the user experience; my fear is that webusers are going to start losing faith in google ads, which would eventually lead to a decrease of CTRs across the board.