goodroi - 9:30 pm on Nov 27, 2012 (gmt 0)
I've faced large drops multiple times and each time it is a unique situation requiring a unique solution.
Here are some things to consider:
#1 - Make sure there are no technical problems. I've personally encountered large scale drops due to stupid employees & hosting companies messing up the robots.txt and .htaccess files. Once you fix the technical mistake you should rebound fast.
#2 - Remove the spam and check for hacks. I've also had sites running on wordpress get hacked so bad they lost rankings. Good news is once I deleted the hack and closed the multiple backdoors the hack opened, Google quickly returned my rankings & traffic
#3 - Ask yourself and I mean really ask yourself what value your site provides that isn't found elsewhere. I ignored some of cash cow sites and that allowed the competition to overtake me and I lost my traffic. Are you providing unique valuable information on each page? Or are your pages more similar to computer generated low quality pages? If this is the case it is going to take much longer to rebuild and recover but it is possible.
PS I personally would not spend too much time looking at rankings. Google is personalizing serps and that can throw off your testing. Even if you work around that you still need to account for the bells and whistles that appear on the universal serps, which can decrease click-throughs even if you rank #1. I prefer to look more at traffic patterns and less at individual rankings.