Mate, I also hurt by google because of my 404 errors and not found errors. In the month of sept 2012 suddenly my ranking down #13 to no rank. I don't know what happened but i am waiting for my website will back(maybe it will back in few days) but after a week i realize google hit me really. But i don't know why... after posting some posts in forum.. a guy told me to check your webmaster errors. I checked and see i have 3k+ 404 errors and not found 250+.... after this i fixed my errors fast and see my ranking, its change no-rank to#58 "big jump". And i got what is my fault... So take the webmaster errors seriously don't think it doesn't matter if you have errors but its happen. Example: ME.