I have done a lot of research on the Google Panda update and how to recover your rankings. It comes down to not more content but how your content is written linguistically to get people to stay on your site. If I would choose one thing to fix my websites, I would choose being a better writer.
Google is trying to weed out content farms, separating the wheat from the chaff. The way it is doing that is relying more on user interaction for and input from users but also looking at how content is analysed on the web as well at the how language used on the site in relation to SEO. That is search engines look at the structure of language and the brain.
There is something you can do to help your website rank higher after the farm update. But first lets look at what happened.

Google’s Panda Update

People started to complain about content farms. For example,  ehow.com. Large sites are the target if they farm out too much work or scrap content from other sites. Ironically eHow.com the scape goat, was affected the least for now.
But a question arose, just because it is a large content farm is it useful and good content? It is seems to be a target, however, some people like it and use it for its clarity.
True semantic search engine result with quality results is difficult to achieve as the web expands exponentially. Therefore the only way you can do this without losing the objectivity of the algorithm is with language analysis, that is how language is formed.
  • Search engines like DuckDuckgo.com simply manually adjust results and eliminate spam sites. This is one approach. However, Google takes a more right brain approach and do it through its formula.
What happened on a superficial level  with the Google search – To start Google’s Chrome browser has a new browser plugin. Google has put this in there as measure against content farms. Users vote down or block out sites (or competitors for the less scrupulous) and other sites, trusted quality sites rank higher.
Before you worry about manipulation, they assert their algorithm is not affected by this demand side measure but only confirmed.
What happened at a deeper level at Mountain View, CA – Messrs Singhal and Matt Cutts both have structured the update so the search results are looking for in-depth articles and compelling content to drive the search results, rather than armies of bloggers farming out content to anyone who can form sentences. They did this by looking at how language is structured (speculated). This is bringing the world’s greatest search engine closer to AI. It not only sees words but understand language in a way humans do or pretends to.

Why some people are rebelling against Google’s approach

The problem is as a linguist I know that content can be subjective as a quality measure. Think about your experience with writing papers in school. Language is evolving and varied from personal experience. If you try to systematize a language you reward a particular way of thinking.
Further, like with the localization and real-time results and keywords appearing as you type in the search box, Google tries to guess what you are thinking based on your profile. Many people do not like that.

What you can do to fix  your website in the SERPs after the Google Panda update

  • Write with lots of synonyms with the use of a thesaurus in a natural style, not stuffing keywords or SEO tricks. Do not be a content mill, quality not quantity.
  • The Title is the most important part of your post, then like an old fashion news paper the first paragraph and so on.
  • Writing longer posts with research.
  • Revise posts and add content to posts that have fallen this is key. Do not drop you lame posts, rather make them compelling. Make it so people stay on your site longer and do not bounce off.
  • Write with perfect grammar, spelling and sentence structure but in a natural way.
  • Write as if search engines do not exist and you are writing your boss at work a detailed analysis of a specific problem or a friend on a personal issue. That is, write more researched posts like you are writing for school or write natural and from the heart.
  • Learn to write in a more organized fashion, machine love structure, poets are not paid in any reality.

Lastly, do not panic. SEO is about keeping things honest and intelligent, improving your voice on the web and with time your website will be recognized (again).

More ways to regain position after Google Panda

  • add long tale comment titles
  • I will experiment with CSS menu on some sites
  • add length to old posts
  • improve website navigation with more places and reasons for people to stay on my site as now I am a minimalist and I noticed bloated sites like huffingtonpost.com get a lot of repeat visits
  • fewer ads
  • check people stealing content, I am finding more.
  • check outbound links, people say this is more important now
  • check miscellaneous  things like 404 and weird pages and errors and code on webmaster tools
  • continue to use my brain to explore new ideas
  • maybe still a wow introduction page

Update on the Panda update

Panda is still more of a mystery than solved. I think that is correct. Know one really knows what is going on, at least enough to effectuate change and recover.

One idea I had was Google has a greater lag time from the point you change your website and the SERPs change in response. This way people can not simple change and test until they figure out the variable that are most important in this update. Maybe not, but it is interesting that nobody can really recover.

I think your post is right on focusing on things like bounce rate, but also return visits. This is what I meant by build a site that people find without Google. If you have a large feed or people find you anyway, without Google, this is a sign you are a trusted site to Google and they will send you even more traffic. This is why eBay got more traffic and eHow less.

I use a simple WP theme on my site and it was hit by Panda. A few people I know have the same exact theme and set up, and they increased from Panda. Which leads me to conclude onsite traditional SEO is not as important.

One thing they did have is more of a community, than I.

Also maybe their writing style is different, like they targeted longer-tail keywords not popular searches.

Maybe simply the more unique your title is, it is a strong signal you are not a content farm that targets highly searched words. So if you are more of a poet than an SEO you will be rewarded.

I do have a pet theory (pure speculation),that might contribute to some decline on website. It is this: sites which have a lot of titles that correlate with exact matches (or close) on high searched keywords could have been effected. ehow.com for example built its empire highly searched keyword phrases like ‘how to SEO a website’ and this was usually the title of the post.
I had a lot of similar matches on my little site on Political Economy and it seemed to have taken hits on those pages that were matches.
Not of course that does not explain everything or maybe anything. It is just a theory and an observation.

These are some of my ideas.

If you have questions ask. Do you feel Google made things better or worst with the farm update?