@ichthyous, netchicken1: I have had my hands full lately examining the text SERPs, but I just took a look at some familiar Images searches in response to your post.
Searches for which both our clients and relevant competitors used to come-up, nearly all of the relevant sites are now GONE
Seeing a lot of partial keyword matching (just like with text), resulting in less relevant results.
Seeing spammy web sites like -
now coming-up on the first page.
Also seeing multiple yellow page sites now coming-up on the first page. This even included a picture of the front of the yellow page book on the first page!
In other words, if you took the AT&T Real Yellow Pages out of your closet, and took a picture of the front cover, that is what is showing up on the first page of a competitive commercial search!
But amazingly, the AdWords at the top were all spot-on! ;)
It appears these problems have now spread to Image Search as well. :(
"I have also seen a big overall drop in text search traffic as well since the beginning of May."
Join the club. You might want to read at least the first post in this thread regarding that topic - Is History Repeating Itself at Google?
And perhaps join the conversation, either there, or here - Google Updates and SERP Changes - June 2010
Be interested in hearing more about your text search problems.