I've been working with somebody that has their website (that he designed) by web easy 7. It's one of these sites where you don't have to know HTML, CSS, etc - basically drag and drop type gui that is very simple to setup. I can best describe like a web 2.0 property where you can add pics, video and other features. When I started backlinking to his site - he was indexed - but not in the top 1000. He then got in around #250. I was happy - now I could start moving him up. Then his site dropped out of site. I've seen this happen before to new sites - but his site is two years old (checked on that) and has a PR of 3. I only did about 10 - 15 backlinks a day (and I'm still continuing to do it). Any reason why it would disappear off the SERPs like that? Maybe because it's one of those canned websites?
Google bump up new content for a short while it then drops back down, other than that what types of links are you building are they quality themed links?
Sounds like you got hit by the anchor text penalty perhaps. Keep building more links and vary the anchor text...go back and change the anchor text up if you can on the old links. Ignore me conclusion if you have been varying them enough.
this can happen on old sites as well. especially sites that are 2 year old and have not had much activity in a while. all of a sudden you start adding backlinks to it which bumps your ranking for a short period of time then goes back to nowhere as google needs more data to rank the site properly. no worries as it is completely normal. keep building backlinks and it should come back up over time
some webmaster also facing this problem too, but don't so worry, always keep your site fresh with content and building some backlinks and someday the site will up again.