1st page on Google to gone....Could it be Reach Local?

I have ranked on the first page of organic search results in Google with my keywords for a couple of months. Before that we were on the first or second page of Google for the last 4 years, something we have worked hard to obtain. We recently stopped showing up in any results for our major keywords. Google and Yahoo are not placing us. In Google if we type in long tail specific keywords we sometimes show up on the 2-3 page, but those aren't the keywords we want to target. The only thing we have changed on our site recently was adding our company to Yahoo directory (which increased our rank). However we did hire a company to do some local advertising for us. The company (Reach Local) places the site on their proxy server. I have read other forums, that were of out of date, but people complain that this company did the same thing to their page rankings. The company claims that their efforts do not effect search engine rankings at all. Could their efforts be changing our rankings and even making us not placed? Why else would we just disappear?? We also found Google's crawl and noticed pages were coming up with 404 errors, however they were pages similar to our site but not the same. ex/mailing instead of mail Does anyone have any suggestions as to what this could be? And more importantly how to reverse it??