fathom - 9:17 am on May 5, 2013 (gmt 0)
@Fathom believes that I was not hit by Penguin. I had no manual penalty applied, so whatever hit me was algorithmic. If you go with @Fathom's theory - that it wasn't Penguin - that means that if he's right, other sites could be chasing phantoms too - that they were hit by Panda coincidentally on the Penguin day. I don't know how anyone can validate that theory though.
While PENGUIN isn't just about artificially developed link anchors most websites that are impacted by PENGUIN have a link problem.
The opposite of "white hat" SEO is something called “black hat webspam” (we say “webspam” to distinguish it from email spam). In the pursuit of higher rankings or traffic, a few sites use techniques that don’t benefit users, where the intent is to look for shortcuts or loopholes that would rank pages higher than they deserve to be ranked. We see all sorts of webspam techniques every day, from keyword stuffing to link schemes that attempt to propel sites higher in rankings.
Since you clearly don't have a keyword stuffing issue and Google doesn't suggest any other forms of webspam beyond stuffing & linking - linking is required and in your case... out of all the queries you lost... how many have some links to your domain?
All other things being equal what remains is usually the correct one!
Get a few webspam links to a single phrase that you believe is negatively impacted by PENGUIN.
Since there is no evidence of PENGUIN impacting your domain you'll rise.
I don't recommend you invest in webspam I recommend you determine that you haven't being impacted already... and because PENGUIN isn't overly granular a few links out of 120K or more is a few grains of salt.