After much testing, Google has seem to officially drop the seven local results in the web search results and gone with a 3-pack block.
For all the queries I try that would generate, I am now seeing only 3 local listings with a link to show more. This is opposed to Google showing seven local listings with a link to more.
Here are some screen shots of the new three-pack:
Here is a screen shot I have from a few months ago with the old look:
It seems like many of the local players are upset that there isn't a more diverse set of local results, which is impacting their clients that fall below the 3rd listing in these local results.
I cannot tell you how many notifications I received about this in the past day or so.
Forum discussion at Local Search Forums.