I recently lost all my Page Rank on a blogger hosted blog. I was only up to PR 2 but after the last google toolbar update I lost it all. I did customize the blog myself - new banner, new layout AND I made the comment section "dofollow", would either of those things affected my PR? Should I expect it to come back after next toolbar update?
Only if you have been reported for selling links or have linked to a site that has been reported as buying links. May be other factors as well.
I wouldn't think that making dofollow would cause this, as there are many blogs out there w/high PR yet are dofollow. Just stick with best practices for SEO and you will be fine. Check your backlinks to see if any of those sites are penalized for any bad tactics that would bleed over to your blog.
No it means you lose PR juice to people who are linking off your page, but does not affect the page's PR.
I have answered that question in the thread "Is it true that outbound links hurt PR?" Here: http://forums.digitalpoint.com/showpost.php?p=10529799&postcount=5 Please use the search function another time...
Just make sure your site is well optimised, make sure you manually approve all comments, as most of comments on blogs are spam and you could be linked to a site that is showing up as in a "Bad Neighbourhood" or Google might think your selling links or linked to a site that is selling links.
Check out all the comments given in your blog. Remove those comments which are not related to your theme and if any comment is related to porn, adult or casino site, immediately remove it. Also do some blog directory submission and forum posting to promote your blog.
Google can not take away your PR because your blog is Dofollow, I guess other factor must be responsible for that action.