After his opening 66, two immediate birdies moved the 37-year-old to a share of the lead but six bogeys in windy conditions saw him losing ground.
A record nine players share the halfway lead on eight under.
These include first-day leader Welshman Bradley Dredge (72) and English Ryder Cup player Andy Sullivan (68).
Thailand's Kiradech Aphibarnrat, South African duo Thomas Aiken and Jaco Van Zyl, Spanish pair Jorge Campillo and Nacho Elvira, Finland's Mikko Korhonen and South Korea's Jeunghun Wang are also in the leading nine-strong group.
Ireland's Paul Dunne is sharing 10th place, a stroke off the pace, after adding a 70 to his opening 67.
2010 US Open champion McDowell has dropped to 89th in the world rankings, and as it stands, is not in the fields for either the WGC World Match Play in March or the Masters a month later.
Graeme McDowell dropped five off the pace at the Qatar Masters after struggling to a three-over-par 75 in Friday's second round in Doha.