I'm experiencing something like this now. The number one site in google for a specific search term, from a specific location, has a DA of 1. It has one link to it from the web design company that created the site. My own sites homepage outscores this homepage with every tool I use.
It's good to have a high DA, but Google can punish your site for a variety of reasons. If your site is on a shared server and that server is home to some dodgy sites then you could be penalised. I assigned a dedicated IP to my site which helped a bit. My own site was for a business that was part of a larger business which had its own website. There were a number of links between the two and were initially both on the same shared server, so creating the dedicated IP helped here. I also removed all the links between the two sites and then created only one link to the other site as the original links were not really necessary.
I'm still trying to get the site to rank higher than the lower DA site so I'm sure there are plenty more things to try. It's trial and error I suppose.
