You have not been penalized, you simply have not earned the higher rankings you desire. I checked your website and found that you are ranking on page one for many different long-tail keywords that your pages seem to be targeting.
The main problem I see is that your keyword targeting is focused on super high competitive terms and zero traffic terms. You are not going to receive traffic on either of those extremes. At least not until you have out promoted the competition on those super competitive keywords.
Your higher rankings early on were likely due to the short term boost of QDF. Now that a temporary boost has worn off, you need to go out and do some solid promotion. Do some meritorious link building, advertise a little, build some real value in your content. Start targeting long-tail keywords, with traffic, that uses your primary keywords as a root. Once you start building up traffic on those long tails it will help boost the short head keywords.
