Sgt_Kickaxe - 10:20 am on Apr 14, 2012 (gmt 0)
Google rolled out Caffeine to be able to index the web at lightning speed and then rolled out a periodic update system(s) like Panda. I don't suggest you try to understand them all too much because they don't want you to.
Do the dance - see what the site looks like to Googlebot, rule out a hack, see if your competitors are up to no good, see if they have done well and passed you in rank(top 3 get most of the traffic, even a 2 spot drop can cut you down 75%) etc.
What you are describing doesn't sound like a penalty to me, but when you've done the dance and are sure your clean file a reconsideration request and move on.