Ranking Issues Recently Popping Up

[AarcMediaGroup]

We have a site that based on your research tools, holds its own in almost all aspects in regards to # of links, # of different linking domains, quality of links, mozrank, moztrust and all that stuff.  Compared to our top competitors, we do very well based on your tools via our campaign monitor.

The issue is we seem to be dropping like crazy every month in our rankings and traffic despite this fact, and we can't get our head around the cause.  I do have a couple of ideas, and I wanted to run them by you guys to get your opinion.

Domain:  bonitaj.com

My Thoughts On Possible Issues...

1.  Text Content & Panda Update

I know one of the big things with the panda update was quality of content.  I know one thing we have for sure is a lack of "text-based" content.  Sure, we have home page, main cats, sub-cats and product pages, but they are mostly just windows into the product pages, and don't have a whole lot of good copy.  THIS IS MOST EVIDENT ON OUR PRODUCT PAGES, where each product page is loaded with content, but only 3-4 very short paragraphs of text.  Do you think this is hurting us?  THE ONLY ISSUE IS THAT our competitors also don't have a whole lot of text-based content on their pages.

2.  Too Many Category Pages & Same Products Featured Somewhat on them

I think another problem may be that on each category page, we do have a lot of the same products featured.  I don't think its crazy duplicate content or anything, but I do think that back in the old days we got a little crazy with creating "niched out" category pages that pretty much feature the same products as some of the more important and base category pages.  Do you think this is hurting us?

I've pitched a solution to this that involves trying to tone down the amount of sub-cats we feature that were originally geared towards attracting long-tail traffic.  In the end that really isn't working anymore anyway, so maybe we're spreading our site thin by going to deep with some of these niche category pages?

3.  Lack of a sitemap?

We used to use an xml sitemap, and really don't anymore.  We have nothing on file with google webmaster tools.  I've recently read in one of your blog posts that a simple thing like adding a good sitemap could help our 600+ page site or so get crawled a bit deeper allowing more pages to rank?

IN THE END, MY QUESTION IS SIMPLY, IF THERE IS ONE OR TWO THINGS I CAN DO TO GET OVER THIS HUMP, WHAT WOULD YOU SUGGEST?

[AarcMediaGroup]

Interesting note to add to this, I did just notice via Google Webmaster Tools, that our blog had been hacked and 150 or so of our blog posts were injected with hidden link spam.  In webmaster tools it said that the 2nd biggest keyword within our site was Viagra.  So that is definately playing into these drops in rankings I'm guessing within the last couple of months.