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Unfortunately it still works pretty well.

Your site disappeared from entire search results on all keywords?

Hi!

You need links, especially high quality links. Start from preparing your SEO strategy, in your case you don't need huge amount of links for your local keywords. If you'll plan everything wisely you will see progress.

You can start from directories that you can find at http://www.seomoz.org/directories this is good start for you.  Think about intresting informations about your niche or about product you sell. Write short press release for local news websites maybe a few actual trends about that kind of business. Search for local journalists which are interested in local business or economy, if you give them interesting info about your business you have chance that they will use it and write something about it. And you will earn link!

You can also write an article to post on site like ArticleBase, remember that it must be unique and good content. Remember about social bookmarking sites, facebook page (i noticed that you already have it), Google+ page and many more.

Hope it will help you.

Good luck!