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We think we lost the #1 spot because the #2 in the SERPs bought a text link from our homepage. We sell sponsored text links on our homepage which we run through phpadsnew. This competitor requested that their link not be run through phpadsnew (since G is not able to read it) and instead be hardcoded on our site. We agreed after he paid an additional amount.
We were ok with the #2 spot (at least we're still in the SERPs), but to disappear altogether is another matter. The only think I can think of is the fact the we duplicated a copy of our index.htm page to show a customized version of the Google Websearch last Friday. We sent an email asking the Adsense team if our customization is ok - and we received their response back on Monday. So the duplicate page was live from Friday to Monday. We removed it as soon we got the reply from the Adsense team.
Could that be a reason for the disappearance of our site from this keyword SERP? We still come up for many of our keywords, albeit less important, and our index.htm is still in the G index. The index.htm has retained its rank for another two-word more general keyword for our industry.
Our backlinks have increased; we don't link to bad neighborhoods, we don't even obsess about SEO work on the site. Falling out of the SERPs really hurt :o(
Thanks