freejung - 9:33 pm on Jul 28, 2010 (gmt 0)
This really sounds like the classic Mayday Update problem. You had a lot of long-tail traffic on a very large, very authoritative site, and now it's gone down. There's been a lot of discussion of Mayday.
This didn't happen to me, I don't think any of my sites are big enough, but I can pass along what others seem to be saying about it, I've been following it pretty closely. It may have to do with link juice as BradleyT suggested. You should go through some of the Mayday threads and see how others have explained it, if you haven't already.
It appears that this has to do with Google raising the bar for ranking for long-tail keywords. On a huge site like yours, there will not be enough link juice to raise all of those massive number of deep pages above the new minimum requirements. So you will no longer come up for long-tail terms that used to bring traffic to these pages. I bet you could see the effect of this by delving in your analytics. Look at the total number of keywords for which you are getting traffic.
If this is correct, adding all of those new pages may actually be making the problem worse by spreading your juice even thinner.
Apparently the best thing people have been able to come up with as far as a solution is acquiring large numbers of deep links. Not sure how you would go about doing that in your niche, but it's worth thinking about.