Let that be a lesson, it looked for all the world like a panda slap, but it was a hack.
I hate to be the bearer of more bad news, but you might need to call in a security guy. More than likely the hacker left a back door.
And yet people still keep adding to the thread with ideas about content, panda, blah. Sometimes it's depressing the bad advice and stupid posts you have to trudge through to get some useful information...
As for a back door... when my site got hacked last year, I had a helluva time keeping the iframe injection from coming back. It hit three sites I had installed on the same host, and no amount of changing my passwords fixed the problem. I eventually decided it must have been a problem with the host/server. I had had some other issues with that host, so I dropped them like a bad habit... and no more problems.
I did find a nice plugin - WPAntiVirus - that checked the theme on a daily basis and e-mailed me if there were any problems (like random malicious links). I'd highly recommend it... cause otherwise you may not notice you've been hit until it's too late.
My site was hacked, find alot of porn links when i look at the source code. What to do next? Shall i inform google about this?
Fix the problem first. Obviously.
But after that, I would go into Webmaster Tools and submit a request for Reconsideration of your site. When, I did it, I got a confirmation that they received my request... and absolutely no other communication. But, a couple months later, the site was back and doing fine. Just explain what happened, and hope for the best.
