To answer your question regarding link building, I only have around 250 links so I haven't been that aggressive. I've also never bought links, I just manually send emails out one by one asking for links back with the same anchor text.
Well, I HOPE that wasn't what brought upon your downfall, because requesting backlinks by email is certainly the main focus of my link building campaign...
Also, that would certainly mean that most sites would be vulnerable to google bowling.
Again, it seems odd if that was the cause, because the top sites in the keywords I am tracking are doing WAY MORE SPAMMY things than asking for a link back in an email (e.g., mass directory submissions, paid links, link exchanges with off-topic sites, keyword-stuffed anchor text in back links, etc.,).
One more thing: Are you able to look at your traffic on an hourly basis throughout the day? Does there seem to be any pattern of throttling? Maybe that the traffic faucet is turned on for a few hours, then turned off, then turned on?
Have you read through the various threads on traffic throttling on this forum?
Are your friends and family seeing the same TITLE and description in the SERPs? I know google has been increasingly experimenting with the titles and descriptions that are being shown in the results, and could it be possible that it has SOME effect on the results?
How are your time on site and bounce rate metrics? Is there anything suspicious there?
And are you absolutely sure that you don't have a technical issue that could cause this? (For instance, I accidentally put a noindex metatag on my HOME PAGE a few months back, and it took about six weeks to discover that. Oddly enough, it was the INTERNAL pages, and NOT the home page, that seemed to suffer the most.)