Quite often when you make sudden major changes to a site, Google will need time to re-evaluate it, and in the meantime will drop its rankings. A full recovery could take several weeks or even longer.
I also think that major revamps might have a long-term effect on how much trust Google gives to a site.
I just tried to make a list of things that might affect how much Google trusts a site:
-- large number of redirects
-- large number of blocked pages
-- large number of deleted pages
-- new pages being added at a rapid rate
-- content is frequently revised or re-written.
I think all of these could have a long-term negative effect. Of course I can't prove it, rather it's just speculation on my part.