Google suffered a temporary case of dementia earlier today which resulted in Digg being erased from Google's indexes. The deletion of Digg from the index resulted from Google accidentally applying a Webspam filter to the whole site rather than the one link they were trying to disallow.
We're sorry about the inconvenience this morning to people trying to search for Digg. In the process of removing a spammy link on Digg.com, we inadvertently applied the Webspam action to the whole site. We're correcting this, and the fix should be deployed shortly.
It comes at an ironic time. Just a few days ago, Digg's Kevin Rose announced that they would build a replacement for Google's ill-fated Reader. Digg's General Manager Jake Levine added that the accidental removal wasn't too terrible for business:
The good news is that it doesn't really impact us all that much. The vast majority of our traffic is direct (like 90 percent) so it's not a huge deal for us from a business or user perspective.