Hi there.
First, "...the understanding that there would not be any loss in page rank" - where did you get that info? 0.o It's well-known fact that there always be a downdraft with a period of recovery.
To answer your question - yes, you'll recover (assuming all 301s were done correctly). But it will take time. The problem is that your shop initially had the power and authority of your main domain (when it was brand.com/shop/blabla). Now, it's a brand new domain, with no history. And yes, even though you have redirects, it's still much closer to starting new domain, rather than redirecting domain completely.
Think of it as instead of building second story on top of existing house, you have to build brand new building with foundation and all, using some materials from your existing house. Who suffers? - both. You are taking away from existing place, and it will take longer and more resources to build up new place. Is it beneficial? - Sure, after both buildings are built - you'll have 2 great places to live in.
Hope this makes sense 