Recent ranking drop followed by strange behavior in SERPS

[BrianQuinn]

Recently on the evening of August 5th almost all of the keywords our pages ranked highly for dropped by anywhere from 5 to 8 pages. The only activity during this time was an article that had been picked up by a major news outlet and then was apparently copied onto other sources with links to our domain and article.

More puzzling though is rather than simply having the same page show up lower for a keyword, in a number of instances a different page is now shown for the result, often with less or no relevance to the keyword. In some cases, for a single keyword phrase we've seen as many as 10 different pages rotated throughout the day when performing a search. Prior to our rankings falling, we've never seen this behavior.

[FedeEinhorn]

Most likely a penalty. Manual or algorithmic, did you check your WMT? They are now showing all manual actions (and some algorithmic too, such as a link devaluation).