I had a similar story several months ago. All the internal pages lost
PR. Home page kept it. I figured out that I was penalazed by Google. I used to run another site on the same IP, and sites were interlinked. I was going to shut down the second site for a while, but always postponed it. When I realized that it causes a problem, I shut it down, and my
PR of all the internal pages came back in about a week.
I think if your internal pages loose
PR, but the home page still keeps it, you are penalized, but this penalization is not severe. As soon as you fix the problem, Google returns the
PR. Sometimes it is just difficult to find what actually Google doesn't like.
Olga