Many are posting about lost rankings, dropped PageRank and reduced backlinks, plus bizzare/old search results at Google.

Firstly, do not read anything much into the Google toolbar pagerank figures right now. Many, many webmasters are seeing grey bars and PR0s, although their sites have not actually been penalized, and still enjoy high rankings/google traffic. Also, the fact it appears you may have lost many backlinks, makes you only one of millions of other webmasters. Old database listings and spammy sites re-emerging is also being seen. It looks very much like Google is broken for sure.

What is happening however, is that Google is in the process of transition to a new algorithm which is incorporating new spam filtering, ranking and pagerank calculations. Google have publicly quoted that backlinks, pagerank calculations, new ranking filters will be added slowly within the next few weeks, and that the results should be settled down by mid June. Those waiting for the deepbot may also be in for a long wait as it seems the way pages are picked up (spidered) is also changing. More on that as things become clearer.
Basically, do not worry just yet about your rankings/pr/backlinks as Google is undergoing MAJOR changes right now and is by no means settled. The time to ask 'Am I penalised?' etc. should be once Google has settled, some time mid or late June.

I know it causes concern, especially for those whose business relies on Google traffic, and I know the temptation to have your pages analysed to death is great. But please folks, don't worry about it just yet. There is however nothing you can do, and it would be unwise to start changing your on page optimization until things have settled down and more about the changes is known. It is basically a dance that is taking a whole month to complete.

Complaints please to Google not us