“So a huge UN-Managed link directory is a HUGE problem?”
Huge link directories are a bigger problem in that “bad neighborhood” linking is now a lot worse than before. Linking to a site that links to every bit of trash on the Internet can cause you trouble. I’m sure a lot of gambling sites that do tons of link exchanges with anybody are shooting themselves in the foot badly because they don’t pay attention to who they link to links to.
But that has nothing to do with PR. In terms of PR, think of it as you having a bunch of votes… say 10,000. If you send 4000 of your votes off into the mist where you get no benefit in return, you are hurting yourself because you could be sending those 4000 votes back to your own pages, or to legit link partner sites… OR, you could just have 4000 less links, and each one of your remining links becomes more powerful (for example, combine the power of 4000 PR3 links and you might have 500 PR4 links).
On the other hand, if this HUGE link directory is not sent a lot of PR by you… for example, it just has one single link to it from your main page, but nowhere else, then it may be doing little harm. The difference between PR1.4568 and PR1.3984 isn’t enough to bother about.
“If people quit returning in-bounds and you don’t catch it, that’s huge, right?”
It depends. I wouldn’t usually say huge, but it matters. If you have several front page links not being reciprocated, yes, that likely could be called “huge”.
“So checking links or smaller easy to manage quality link sections would be better. Could be an easy PR boost.”
Yes, especially the second. Quality is better than quantity, in terms of PR.
“I noticed that a lot of sites lost another hunk of PR this months spin… any insider word as to what happened this time? or was it just me and my sites?”
My view is that most quality sites did well this time, while sites that relied on sheer volume of links did not as well.
The most obvious Internet-wide phenomenon this time is Yahoo went to PR10, so many many Yahoo Directory categories gained a full point in PR. So… sites in the Yahoo Directory gained in general while sites that aren’t fell. That isn’t the ONLY thing that happened, but now that is HUGE.
In your case Blackhawk, I think Google is sorting out php/querystring PR issues. A lot of sites with querystring pages have shown guessed PR or whitebars instead of actual PR, and I’m not sure that Google has it sorted out yet how to best handle these sort of pages. So it could easily sort out fine next time, but just glancing at your site, I think you need to focus your links better. Less links off the main page to a few strong subpages with static/unique urls (even if .php) , which then link back to your main page, and then link down to a larger mass of query string pages.