Just a little over a week ago, my PR went up to 3 with the PR update, after being PR 2 for about 2 months. But then yesterday it dropped back down to PR1. How do I find out what I was penalized for? I don't really know of anything that I have done that would penalize me.
It could be a number of reasons. I wouldn't worry about it though, I think Google is placing less and less importance on page rank and it has next to no ranking power. Otherwise Adobe would be top for everything (instead of wiki)
I agree with lifeplayer. A number of backlinks had been removed, you should check backlinks of your sites.
You weren't penalized. If you had a PR penalty, your PR would be down to zero or gray barred. Most likely you either lost some links or the PR dropped on some links. If you rely on forum links, social bookmarking and/or blog commenting, you may notice fluctuations with those strategies. They give you a rankings boost early on, but then as those pages get pushed into archives, they often lose some PR and link weight. The exception is link sources that are popular enough to get some external backlinks of their own.
Chances are those sites that were linking to you might have also lost PR, thus causing your PR to drop as well.