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Oh, no what you did is perfect! I guess I meant the site architecture/navigation, but you answered it in your original post when you said "Same content" so disregard that question. Congrats.

Looks perfect to me too. Did the internal linking structure change at all or is that still the same? If it's all the same you should be right back where you were in no time.  And you should see some benefits from having a more common sense, easy to understand URL structure. Cheers!

EGOL is right, you can  definitely out rank this domain. If anything, the fact that this website is so terrible and is all images is good news. He's wasting an excellent domain. You should be able to outrank this guy in no time by applying basic SEO.

It used to be that your merchant circle listing had a lot of potential to quickly rank organically and drive phone calls and leads directly for keyword +city name queries. There would rarely be any click-throughs to my client's websites though. I just checked a clients analytics from the past few years and they got grand total of 22 clicks since 2008 (22 out of 25,000+ referring sites clicks). However, I do know from phone tracking that we were doing at the time that they received at least 5-10 calls a month from their merchant circle listing. Things have changed though. Merchant Circle listings don't rank like they used to. You used to be able to rank them just by "connecting" with all the nearby businesses, but now you have to put some serious effort in. It's not just because of Panda, it's also because there simply isn't much real estate on the front page for a profile page listing anymore.  IMHO, they're little more than a good citation these days. I think the time and money is better spent elsewhere.