What particular factors might have begun to inhibit participation in 2006, when we know it began to stagnate?

I am the antithesis of your average Wikipedian: female, 56, did not finish 10th grade and an autodidact. I also consider the concept and execution of "political correctness" to be obscene.

Bluntly then:

• Wikipedia is top heavy with policies and guidelines, in language that is NOT easily comprehensible; it discourages participation from the get-go. In other words WP has become "Nerdsville". (And no offense to nerds intended, either!) A major overhaul and condensation is indicated.
• Advertise in language that is short, sweet and to the point. Run banners that change every minute of the day:

Got the info you wanted? Tell us something you know!

If you learned something useful - leave some knowledge behind!

Know something interesting? Put it here!

People like you make the difference! Join Wikipedia today!

Everyone knows something important. Share it with us! etc.

• In business an owner will almost always choose a manager in their own image, i.e. someone they understand and can relate to (or crudely: 'Fish always stinks from the head'). WikiMedia need to bring an iconoclast or two aboard.
• Finally: get a professional trouble-shooter with a proven track-record to analyze the problem. "You get what you pay for."