1. should be better if you install forum in subdomain

2. no it is not but you should strive to get rank for subdomain as well as main domain .

I recommend you to install a better forum like VBulletin or ... .

I have just checked your website , you should do something to get back your rank as quick as it would be.

1- Create high quality backlinks

2- submit you website on relevant directories

3- most important things is do social , Share your website on social networks as much as you can. some of them are

• Twitter
• Facebook
• LinkedIn
• YouTube
• Google+
• Pinterest
• Slideshare
• FourSquare
• StumbleUpon
• Flickr
• Tumblr
• MySpace

Remember, you should share all of your page links .

4- Watch you on-page seo ( titles and ... )

Although It takes time to get back your position , social media , bookmarks and networks can help you to shorten time.

Hi check below link that would be helpful

10 Beautiful Templates for JomSocial

http://www.jomsocial.com/blog/10-beautiful-templates-for-jomsocial.html

If you have time , follow below step to remove your bad links

1-Check your backlinks in Webmaster Tools

2-Look for backlinks from outside your country

3-Look for multiple backlinks from same website

4-Check homepage of site linking to you

5-Check most common anchor text used

6-Check pages your links are on

7-Create spreadsheet of all sites linking to you

8-Check Serps results of sites linking to you

9-Find contact details of sites providing bad backlinks

10-Email them and ask for your links to be removed

Hope it will be helped you.

That would be ok. Your should read following articles as well .

http://www.bayshoresolutions.com/blog/seo/what-are-hcards/

http://www.webmonkey.com/2010/02/make_contact_with_hcards/

That would be ok if you use these plugin as well :

http://wordpress.org/extend/plugins/sucuri-scanner/

http://wordpress.org/extend/plugins/gotmls/

http://wpantivirus.com/

That would be ok if you use these plugin as well :

http://wordpress.org/extend/plugins/sucuri-scanner/

http://wordpress.org/extend/plugins/gotmls/

http://wpantivirus.com/

It could be your site is hacked and malware added on your site code. I had the similar attack before. It takes away your search engine traffic to another site (it doesn't redirect you if you are logged in so sometime people never notice it).

http://sitecheck.sucuri.net/results/funeralhomeoptions.com/

You should check index.php file or header.php and ... in your template folder and  .htaccess files as well.

One of the best book i have ever seen for php and mysql

Head First PHP & MySQL

By Lynn Beighley, Michael Morrison

http://books.google.com.my/books?id=nJWN1dyxaJIC&lpg=PP1&pg=PP1#v=onepage&q&f=false