a bad problem

I found a big problem in my website, there are more than 1000 not found errors(404) in google webmaster center, more worse, this has already caused our website’s rank degraded a lot , many keywords disappeared from google search results, I have found root cause, but till now I don’t know how to resolve this issue, I have added a new directory http://www.sino-dict.com/shop/ to check if it will take effects.