freejung - 8:19 pm on Jul 20, 2010 (gmt 0)
I just want to chime in and agree with what pageoneresults said earlier in this thread. It would be a big mistake to conclude from this thread that you shouldn't redesign your site.
I just did a major redesign a couple of months ago that included replacing tables with divs, major changes to the nav structure (recategorization of some subcategories, implementation of new meta-categories, other nav changes), increased text content on category pages, and a number of other major revisions. My rankings didn't even flicker. Indeed, I was surprised at how little difference my changes made to rankings and traffic across thousands of moderately competitive keywords.
Something has gone wrong here. The OP has triggered some sort of filter or penalty somehow. I have no idea why, but I wouldn't advise taking this as an indication that you should not improve your site. It is definitely possible to make major changes without losing rankings or traffic. Make sure that you keep the same URLs or do systematic 301 redirects, don't change your overall theme, and I expect the odds are you'll be just fine.