Local Site Now Ranks Nationally But Lost Most Its Local Rankings?

This is one of the weirdest things I've ever seen before. I do a few different things to make money and one of those things is a side business that I co-own and run with my brother. For a solid 10 months or so this site was performing really well. It was ranking #1 for virtually all of its primary keywords, was ranking #1 in G local, it was completely dominating the SERPs.... but something very weird has happened these last couple months.

What happened is the site lost rankings for most of its primary local keywords. Keywords like "our service nj" and a bunch of other similar keywords. But it's rankings maintained in G local. So it does technically still ranks for some of our primary local keywords. It's just our organic rankings that changed.

Right after we lost our organic rankings I was getting paranoid.... but then we started getting calls from all over the US. Like Florida, Cali, South Carolina, Pennsylvania, New York, etc etc. Problem is we don't service any of these states!

I eventually found out that our site basically traded a good portion of its local rankings for national rankings. And I have no idea why Google did this because everything about this site screams "New Jersey". It's loaded with geotargeted content that target all the towns in our state, it's on page and backlinks are all optimized for NJ. Yet somehow, for whatever reason in the world, the site traded most its local rankings for national rankings.

Does anyone have any idea why this might be happening? About 70% of the calls we now get are from states we don't even service. And I'd really like to get my local, organic rankings back.

Do you use the location meta tag?

I had the reverse happen not that long ago - a local site *also* started ranking nationally, but did not lose local rankings. We put in the location tag, and in the weeks after the national rankings started to drop off - which was good, because those calls were a waste of time.