How do I handle this 301/indexing mess?

[rhoadesjohn]

I'm working on a client's site and noticed a brisk drop in rankings.  In doing some digging I found that the homepage (domain.com) is 301'd to domain.com/home.html.  Here's my problem/questions:

1.  domain.com is indexed by Google

2.  domain.com/home.html is not indexed by Google

3.  both domains have some healthy linking

4.  Is the fact that domain.com/home.html impacting rankings?

5.  How do carefully handle this situation (ex. redirect domain.com/home.html back to domain.com?)

6.  See the attached jpeg for a visual representation of my debacle.

hcIiPAs

[FedeEinhorn]

Why would you redirect the naked domain to home.html? I'd personally would have that home.html renamed to the default page that your server serves as the index, probably index.html and then look if there are any canonical tags in home.html pointing to the named domain + if there are any restrictions for robots to index the page, in the file itself and in the robots.txt file.

If you can provide us with the URL, we would be able to check a little deeper.

Hope that helps.