@globe - I too have GA installed on my site and one adsense panel on the right side of every page. I believe this gives G more than enough feedback to regulate my site traffic. I also have been a $20/day buyer of Adwords since about 2001 with very few changes in that time frame. I just pay for a dozen of so major key phrases. Are you set up similarly?
The absolute strangest part is that when traffic drops off, my serps remain unchanged. According to my AWSTATS I am ranking for about 8,500 unique key phrases per month. They'd have to either drop me instantly from nearly half of those, then restore me instantly to account for this new, odd fluctuation. As tedster mentioned, it would be unlikely that search volume changes that much on their own.
Since about 1998, I have observed my traffic patterns which were previously a nice natural weekly sinusoidal pattern, with a seasonal summer dip yet growing each year. As of May 18th 2010, the pattern is disrupted regularly and has flattened. I suspected the economy is a factor, but my niche actually should do BETTER in a poor economy.
The new year usually starts with 20-30 sales per day, consistently with a slow decline towards April. It stated fine this year, but is now interrupted with days that have only 2 or 3 sales. It's not my dedicated server, (I use alert site to monitor it), it's not DNS poisoning, it's not a hacker, it's just "low T" (low traffic, not low testosterone - lol, coined a new phrase).
I'm not going to say G is being anti-competitive or socialist by "spreading the traffic around", but all evidence points in that direction.