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It depends if yours is a high authority site or not. If its a relatively new site or with low-avg authority, it could very well have fallen under the 'fishy' side of the radar.

Its unlikely that nofollow links would trigger a penalty but the # of links you mention here is staggering so I wouldn't count that out.

Also, Google made 40 changes 5-6 days ago, which is when your saying your site traffic fell so it could be that as well:  http://insidesearch.blogspot.com/2012/02/search-quality-highlights-40-changes.html

I believe its a keyword/phrase based filter. Meaning, the site probably got too many exact anchor links and/or used too much of the same keyword or phrase in the title, description & main body.

Also, like you mentioned, it could be a duplicate content issue - try looking at the re-written content: where you use the keyword/phrase that you are targeting. Perhaps, it wasn't rewritten effectively to be pass Copyscape/ considered 'original'?

Changes should be on deepest level - words/ phrases. Rephrasing alone is not enough if the words used are exactly same.

Also, to get most bang for SEO campaigns/ traffic, I'd try avoiding having content that is 're-written' from just 1 source. I would use many sources and sort of give a 'new take' on this newly merged comprehensive consolidated content piece.  As I mentioned in another post, this huge content piece with a "new take" leads to your article being considered original and unique, and it also adds to likelihood of it attractive a lot more links than just a re-written piece would.

Doesn't matter much since if you use NoFollow you still lose a certain rank "juice". If i were you I'd leave them as it is - but If you are using same content from PDF on other web pages, I will nofollow/noindex them