Is it the general consesus that if your domain without the extension, example: bluelovelywidgets4you does NOT show up on the first page for a search in Google that it is penalized in some way?
My site is one page 4 without extension, outranked by it's own Twitter account, a bunch of WHOIS type sites and several other domains that have similar words BUT ONLY in inner pages: domain.com/bluelovelywidgets4you.
does show up #1 WITH the .com
The site did have great rankings until recently, now most all terms are 100+ except for very long tail KW which are sitting in first positions.
But I attribute the earlier rankings to the Fresh factor, where new sites rank well for several weeks. It only has a few good links, 100% spam free, but it does have an EMD.
So it is possible that it doesn't rank for domain without the extension only because of so little links? OR no matter the general rankings the site should show up for domain without the extension at all times or else there is a penalty issue?
Simply by hearing about your widespread drop in rankings and traffic I would think you have a big problem. I would start looking with the basics:
-make sure you have pages with significant & unique content -focus more on quality of links & less on quantity of links -improve site layout and overall usability -use appropriate social sites to better connect with your market