Need Feedback on Google Panda Hit Site - Out of Ideas

Hi everyone. First time poster, long time reader but I could really use some honest feedback from knowledgeable people and forums just don't cut it. I have a 3 year old niche hobby site (http://goo.gl/aNwGy) that has become well established as a top 2 or 3 resource within my industry. We have more unique, expert curated content written on a daily basis then any other site in our industry, and are the only site in our niche that is syndicated through Google News. I've put a lot of money into hiring experts to write high quality content and have never engaged in any black hat SEO practices. Up until late February of this year this practice had paid off and was reflected in the steady Google search traffic growth we'd enjoyed throughout our first 2 1/2 years.

Then Panda hit and we dropped from about 3,000 unique visitors per day down to about 2,000 per day. Another month later we dropped to 1,400 visitors per day. I removed what little thin content I could find and kept on the best I could.

I purchased two competing sites and merged them into my main site, adding several more expert authors, a podcast, and a well known forum in the process. Thanks to this my core domain's Google search traffic slowly but surely returned. As of last week it was back up to about 2,500 unique visitors per day. Then the latest "Minor" Panda tweak on Oct 13th/14th hit late last week and my traffic dropped back down to 1700 visitors per day. Even before that happened I was being outranked by vastly inferior sites all across the board thanks to most all the large retailers within my niche having the budget to purchase large amounts of links.

So here's the deal, I'm just at a loss as to what to do now. I've tried to be as objective as I possibly can but it just doesn't make any sense. I literally have the best overall content in my industry. My writing staff include legitimate experts, including a former MLB All-Star, a Hall of Fame recognized Author, and a lot of lesser known, but very knowledgeable (and well known within my industry) college educated bloggers and enthusiasts. But I'm getting beaten by thin ecommerce sites who have insane amounts of paid links, various exact match domain cookie cutter sites, and lesser information sites which again engage heavily in link buying.

This seems completely counter to what Google was trying to achieve with the Panda update. I've done tons of reading on the specifics of the update since being hit in February and have hired several SEO experts to give me feedback on my own analysis as well as to perform their own research. We've made some small changes here and there and optimized the speed of the site. Everyone has confirmed that I have the best link profile - its legitimately natural and features links from all the top industry authority sites as well as many mainstream media outlets and everything in between. However somehow I continue to get my ass kicked by 1 dimensional sites which have nothing but paid and reciprocal links, and have no unique content that adds value for visitors. So there's only so much we've been able to change.

Am I really an unintended casualty of the Panda Algorithm (and its subsequent updates)? Or am I blind to one or more serious issues that make this ongoing Google ass kicking justifiable and well deserved? Either way any advice on what to do next would be sincerely appreciated. I'm a young guy with two kids and depend on my online business to pay the bills.

Thanks guys...

I just find it hard to believe that the right answer here is to cut my content budget out and go and use it to buy links everywhere - but that is exactly what Google has rewarding within my niche since late February.