I've noticed that the most common reason for me to lose a game is not lack of knowledge but failure to observe whats happening on the board. This is specially true for rapid games but it happens in slow chess as well. In a recent game i moved a rook to a square where it was captured on the next move for free, although i spent several minutes before making that move! It also happens that i "forget" that a piece is defending something and move it away, or i don't see my opponents threat, even if it is straight forward. When doing tactics puzzles it happens sometimes that i look at it for several minutes and then suddenly realize something like "oh, i have a passed pawn in the top left corner on the board!"
If i could observe more quickly & accurately and reduce the amount of gross blunders i would win a lot more games, specially rapid games. What do you do to improve your observation skill and blunder less?