I'm was born in the US (1969), my father at the time was a German citizen living in the US with a green card and married. He is now a US citizen. My goal is to obtain a EU passport and still hold my US citizenship. Am I entitled to German citizenship due to ancestry? Is it a difficult process?
From what you described, you are already a German citizen according to German law, and have been since birth.
A child born anywhere in the world in wedlock to a German citizen parent was automatically a German citizen at birth. (Prior to 1975, it could only be passed from the father and not the mother; but it's your father who's the German citizen so that doesn't matter. Also, for a parent that was born after 1999 abroad, they can no longer pass citizenship if not residing in Germany, but that is irrelevant as your father was born before 1999.) This citizenship is automatic, and does not depend on being "registered" or on you ever having claimed to be a German citizen.
German citizenship is lost upon voluntarily acquiring a foreign nationality (unless special permission is obtained beforehand), so your dad lost his German citizenship when he naturalized in the US. But that happened after you were born (this is key), so he was still a German citizen when you were born and thus passed German citizenship to you at birth. His naturalization after your birth did not affect your German citizenship, because you didn't naturalize (you couldn't naturalize in the US, because you already had US citizenship at birth by being born in the US). As such, you continue to have both US and German citizenship, forever, unless you voluntarily acquired a new nationality after birth.
(Note that this means that any children you have had in the past (or will have in the future) were also automatically German citizens at birth, as long as you didn't acquire a new nationality before that child's birth, even if you never lived in Germany, didn't know you were a German citizen, and never claimed to be one until now.)
As you are already a German citizen, you do not need to "apply for" German citizenship. You just need to obtain a certificate of German citizenship (Staatsangehörigkeitsausweis). You can get the forms here or here (in German).