Reno - 9:36 pm on Dec 8, 2011 (gmt 0)
Even if you do not recover, improving your site can't do much harm, especially if you're already being punished by google.
I think part of the problem is that "improving your site" is mostly subjective. Some things are obvious ~ broken links, 2MB jpgs all over the page, malware, et al. But other things regarding how content is worded or placed on the page are personal opinions, and as often as not, there is no hardcore evidence that it is a Panda factor one way or the other. One person puts their nav bar at the side and does fine; another puts their nav bar on the side and crashes ~ is the nav bar the issue? Probably not.
Panda is VERY complex and intentionally constructed to confound. Anyone who "figures it out" has only figured it out for themselves ~ another person following that same model to the letter may see no improvement whatsoever. That's why I (and so many others) are saying that the time has come to simply forget Google and proceed to the best of your abilities, so you can at least be happy (and proud) with your own site construction.
Yes, they are the #1 traffic source in the world so admittedly it's hard to not see the thousand pound gorilla in the room, but still, the only way to move forward IMO is to build the best site you can, and at least be pleased with your own efforts. Take the feedback from others if it seems relevant, but if not, do what you think is best.
Panda is a brick wall and the more you hit your head on it, the sooner you'll crack your skull. So do yourself a favor and find your own path ~ either you'll get around the wall or you won't, but at least it's your path.