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If you have 294 links from PR1-5 pages of different domains to your PR5 index page and all of the sudden 40% of them remove your link (it's because you removed the free download section of those Paris Hilton videos) but one guy links to you from his PR8 page exlaining about how much he used to like downloading all of the hotel heiresses' new flicks and how his visitors should go there and request that you put them back up you may end up with a PR7 now.
That does not mean your rankings should improve. Is his link even relevant? Perhaps. We're the majority of the 40% you lost more relevant? Perhaps.
There are many factors to consider. I'm surprised you haven't received lots of replies explaining how "my PR4 site beats PR7's and 8's all day long for competitive serps...".
I'd suggest taking some time to analyze why the PR increased and how your total backlink package is looking.
BTW, the P. Hilton examples were just that, examples.