My site went from 31k pages indexed to 8k since end of November. Traffic also dropped from 47k/month to 33k/month, most of it from organic.
I don't do any sort of black hat, but I do buy a few links (have around 7, but I make sure to buy links from sites that pass value and ones that )
My main link building techniques were guest posting and linkbait (lots of top lists and getting links from topically related sites)
I didn't really build a lot of links November and December. I started ramping up link building starting in January.
I also haven't made any drastic changes in my site architecture and according to my webmaster central, there is nothing wrong with my site.
What the heck happened? Could it be the latest update? I do have quite a bit of duplicate content (from the affiliate sponsors), but probably have at least 800 pages of unique content, nothing was rewritten either.
When Caffeine was originally announced, I understood that it would lead to deeper and more extensive crawling, and to much better data handling capability. From this I inferred that one of the results would be a big expansion in the number of indexed pages.
Instead, it appears that the number of indexed pages is decreasing, and new pages are being indexed very slowly or not at all. This is just the opposite from what I expected.