My wife and I are writers (not webmasters) and have been writing since 1999. During this period almost all the content has been written by us and we have built five decent sized websites that have only AdSense ads that create annual revenue of over US$100,000.
Starting with the Feb 2011 Panda, little by little all our websites started to go down in traffic. None of the reasons that G mentioned applied to us and we were so convinced that there was nothing wrong with our websites, we did absolutely nothing. The loss of traffic since Feb 2011 has resulted in loss of about $125,000 and it has been painful but we only had to cut back on "luxuries" (vacations, shopping, home improvements, etc.), not necessities.
In January 2012, one of the smaller websites was restored to search results as if the whole demotion never happened. I made no changes at all and it came with all rankings intact and since then as we added more content, it has been growing steadily.
The rest of the websites started to see an upward tick with the April updates. This is the first time we have seen the chart pointing upwards for all the other four websites since Panda first attacked us mercilessly. On these websites, we changed nothing except adding new content, as we have done during last 13 years. We have never reached out to anyone for links, don't give a damn about social media, and rely 100% on free search engine traffic.
I am very upset with Google and their broken algorithm (but as a non-computer expert I assume that the task is too complicated for them and computers are still not intelligent enough) but during ever single update in the past, I have seen that we have survived and thrived (though there were painful weeks during Florida and Big Daddy updates, for instance). With Panda I had lost hope (because it is very clear that Google has no clue what it is doing and since it was a disaster from day one, they have just been trying to fix it and failing every single time) and my wife and I were debating whether we should enter new businesses or go find regular jobs (not easy for a couple approaching their 50th birthdays) but this is giving us a ray of hope that we have some breathing room before we do eventually diversify our source of income.
Our lesson from this Panda monster is that while focus on the user and creating great content are noble business goals and Google generally tries to live up to its buzzwords, the algorithms are not perfect and that is how people like us get trapped. While we look for other sources of income, this improvement that we have recently seen may give some hope for all of you who have done everything right. We are not opening champagne bottles and will never do knowing how broken Google is and how easily it could hit us again, but it would be nice to hear if there are others like us.