@MrSavage I am in almost exactly the same place as you at the moment. Very similar timeline a site that used to do well then got hit a while ago came back. I got excited started working on it again and bam now it is gone again worse than ever. However some interesting information has come of it and this might be more for tedster to look at..
1) This site is an EMD
2) This site has ranked 3 or better for the EMD for over 8 years. Last 2 years it was position 1 but ranked under images bar (you know what I mean?) however my images was the first image!
3) In the last Panda update it lost all of its Google image traffic. Which converted ok on this particular site. this reduced traffic by 2/3rds so halved my income as the 2/3 that was lost was
4) Now I actually rank above that image bar and have a proper position 1 but the traffic is still down as the image bar seems to pull more traffic.
5) This site used to get lots of longtail keywords image traffic on minor images that related to the main keyword but didn't have the main keyword in them. However all image traffic gone now as I said earlier.
6) Lastly I have lost most of, if not all my international traffic. This was not huge part of my traffic but it is now noticeably gone.