Many people believe toolbar PR is not related to SERPs at all. However, I'm still afraid with my website because suddenly my PR dropped from 3 to 0 (not in the last PR update but during this March). All my inner web pages which in the latest PR update (february) got PR 1-2 all are also dropped to 0. However, my SERPs are never going down nor penalized. I am still ranked first in my main targeted keyword in google.com. My SERP for my other targeted keyword is even improving since I lost my PR. Can someone explain why my PR is dropped but I never lost my SERPs at all? (in fact, my rankings are improving). I never sold any links, maybe because I put 1-2 links of my 3-ways link exchange partner in my home page? (earlier I have total four external links in my home page but now I have deleted my link partners from my home page, and I have discussed with them about their link placements)
Google is cracking down on sites that are doing link exchanges or sites they believe may be selling links. Your PR could have dropped for a couple of reasons: a) google discounted links from exchanges, or devalued the sites linking to you that were passing PR. b) they manually adjusted your toolbar PR to limit your ability to sell links or do link exchanges. It appears that manually adjusted toolbar PR limits your ability to pass PR, but doesn't affect your SERPS as the PR adjustment was only a visible one, not an internal one (which google uses for SERPS).
I don't think your first point is happening to my site because I believe I have numerous of back links from different web pages. Even if all of them are devalued, my PR should be at least 2. I even think my PR should be around 4 (if this is the old algorithm) because my heaviest competitors for my targeted keywords all have PR 4 (meanwhile I was 3 but I get the first rank). About the second, maybe yes. Maybe they thought I'm selling links although actually I never sell any links.
Hmm... maybe the sites that are linking to you simply lost PR. If your SERPS are improving, it doesn't sound like penalty. Nearly half my sites dropped PR- but moved up 5-8 notches in organic search results
I think you should be happy, as your SERPs are improved. Don't worry about PR, the real thing that matters is the SERPs.
Your real PR might not have dropped. A grayed out bar only means that no pagerank information is available publically. Your could still have the same PR as before, or even higher, but it is hidden under the grayed out bar.
Have you experienced this earlier? If not, how could you have that kind of assumption? Actually, I don't really care about PR as well but I never experienced this mass PR drop earlier (not only my home page but all of my web pages which earlier were PR1, 2, and 3, now all are PR 0).