Saraj thanks for the post.
As a matter of fact i just wanted to post the exact same thing

I had the same experience with the tool.
Probably google "upgraded" the search numbers a little bit so you would buy more ads on the keyword. Its a no brainer. But now people noticed it and its go time. I was exactly in the same shoe, ranking google no 1 for a keyword which was "supposed to " get 4000 hits (exact match) a month. Now the numbers are around 800.
It sucks because you are struggling so hard to reach number one and then not much is happening - of course talking about the long tail keywords with lower number of searches.