The recent Penguin update was implemented a few weeks ago from Google.  The changes can be confusing, and if you don't adapt properly, your ranking may be penalized. Penguin was designed to target webspam tactics, and you may have inadvertently broken the new rules. Web engines are still adapting to the new system, so even if you haven't suffered a loss of traffic yet, don't assume you're safe.  Here are a few suggestions that will keep you safe and possibly improve your ranking:

1. Write good content first, tweak for keyword density afterwards.
Your primary objective should be a good read.  Then you may be able to edit a bit and add in a few key words, but don't let the readability suffer.

2. Use a variety of word and phrases for Anchor text.
The anchor text, link label, link text, or link title is the visible, clickable text in a hyperlink. The words contained in the anchor text can determine the ranking that the page will receive by search engines.  Do not reuse keywords to excess.  Yes, you need to be consistent, but you can probably come up with another phrase or word that gets your point across.  Never use "Click here" as it is ignored by Google and is a wasted opportunity to promote your content.

3. Make sure that the vast majority of links on your site are high quality.
Google is now penalizing you if your site contains a significant proportion of "unnatural links".  These are paid links, splogs, etc.  A few exchanged links probably won't hurt, as long as the majority are useful and of high quality.  Even some of these may no longer be useful to your ranking if they are linked to other low quality sites.  It may be time for you to do some pruning.

4. Make a critical assessment of your pages and perform drastic surgery if required.
Quality, quality, quality, that's what Google likes. Delete pages that don't provide it, or combine the content with other pages if you need to retain it.  Ask some people that you trust to tell you the truth to examine your pages.  Listen to what they say.  Don't spare the knife; it will only hurt worse later.  Add content to the high quality pages.  You know, the ones that actually provide some value to your readers or customers and aren't just one long sales pitch or placeholder for ads.  Keep your audience happy and bring them back for more.