Thanks for your thoughts, Sand. Time on site and bounce rate were fine prior to this drop in traffic. As the majority of our sub domains do okay with the same UI we are trying to see if the issue lies beyond that, eg an historic or off-site factor. That these two subs have been previously affected by Panda would appear to be the one main difference between them.
Our showing in the serps suggests a penalty has been applied. It happened on Dec 11, a date on which it seems more than a few websites took a dive, but as far as I know that date doesn’t line up with any official Panda or Penguin update, so we’re not presuming to know what ails us.
Despite recovering from Panda throughout 2012, WMT still shows over 1m pages Not Selected (all thin and on a relatively small site) that were (along with many more) 410ed at the end of 2011. I guess my question is this: Even though we recovered once, is it likely we remain susceptible to Panda until the majority of 410s are found?