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For sure special characters are not a good idea in title tags. I do not see a point in including telephone numbers in title tags you can keep it in body or blocks and it will still be picked up by search engine spiders.

I think you should focus less on your page content and more on how your website is coded and your inbound link profile. The title tags and description tags on both of your sites contain special characters that shouldn't be there, like bullets and Check marks.  Clean those up first. On your tiling website you've included your phone number in the title tag, thats a definite no no and I've seen sites penalized for that in the past. Just taking a brief peak at your inbound links, I'm guessing links from sites like this is more likely to be the reason for you problems than over optimization: blackhatpwnage.com/how-to-get-high-page-rank/ Your back link profile overall is very key word specific.  That combined with all of the above is the more likely reason for your problems than "over optimization" of your keywords. Best of luck!

The 27th of September narrows your list of possibilites down to two likely ones.  The 27th was a Panda update and the 28th was EMD.  Using an EMD domain name is not going to get you penalized, but it's possible that you were previously getting a lot of ranking benefit from having the keyword in your domain and now you have lost that benefit. Panda affects sites with low quality.  Often there are issues with duplicate content (i.e. content that exists on other sites on the web) or thin content. I would guess Panda is your issue, but I'd need to dig in much further to say so for sure.  For example, this article appears on your site and also on http://www.homeinsights.org/house-painting-cost/.  Duplication like this can cause Panda to affect you.