You nailed it diggathedog! Been a few weeks now though and all the webmaster tools show significant rises (the highest is 24,000%) and I'm back into the $5-10 a day range in adsense but geez that was annoying watching the traffic crash. Hopefully the traffic and money come back fully in a few more weeks. I've been keeping a close eye on webmaster tooks, submitted a sitemap etc etc. It took Google 2 weeks to even notice that I have lots of pages in my sitemap that it hasn't indexed yet despite claiming to index 900 pages a day. It lists them as 'soft 404s'. The site only has 3000 pages so either webmaster tools lies or most of those 900 pages is google trying to pry into all the 'add comment' and 'register' pages as well.
@RumpledElf, you say your old site receives 15k uniques per day and you're back into the $5-10 range. Is it less than $1 CPM or am I missing something? You may also want to remember that dmoz removes all entries which are redirected to another URL. You can redirect your old site to the homepage of your new site to get rid of those soft 404's.
Old site is now getting 1k uniques a day and the new about 4-7k depending on the day of the week, so not even close to where I was last month. I redirected a *subsection* of the site, which had its own dmoz entry (that I didn't add) so that'll go but both sites have their own dmoz entry for the homepage and the old one has entries for some other subpages. I wish I was back up to 15k a day and $1 CPM, for a while there it was under 10c CPM which *really* hurt, I've NEVER seen it that low. Its slowly rising. 9k visitors today, which is the highest since I killed the traffic. I wasn't expecting the redirect to go so badly, I've got used to making a few $100 a month out of adsense, this is the first month for ages I've been concerned about not meeting the minimum payment threshold. Its nailbiting when you've only got $147 and its close to the end of the month lol
I had bad experiences with redirects. Now I am testing domain redirects again. I have redirected 10+ similar sites to the homepage of 1 similar site since a week. The redirected site dropped from the first page to the third page of google in the second day of redirection. Now I am not sure if redirecting non-www to www version is a good idea or not. I will remove all of the redirects. By the way, 301 responses are cachable. So, if you are not sure what you're doing then it is better to send some necessary http responses to prevent caching.
After 1 month, 3 days, all my keywords that the redirect ate have popped up from languishing at 50-100 in the SERPs to hovering around the 9-12 mark, and the rise was literally overnight. Analytics reported a rise from 18,000 searches to 35,000 overnight. Adsense is back at $8 a day, still under where I was but not too bad. So, getting there ... but that was a loooooong time to wait. Remind me to delete the old content next time I fork off a chunk of a website, instead of leaving the original there.