Robert_Charlton - 7:22 am on Feb 15, 2012 (gmt 0)
I'm not seeing answers to any of the specific questions that were asked here about navigation path change, internal links, etc... so it's really hard to comment about the technical issues on this thread. IMO, the site map would have nothing to do with it.
I was under the impression that in some cases google will actually ignore the rel= issue when there is thousands of pages.
I agree more with your original reasoning...
We also found out that all of the 3000 pages in the blog had the rel=canonical tag pointing to the home page of the site. This seemed like a large mistake on our parts as well. The home page is where all the rankings were and got nailed.
It might take Google a while to figure all this out.