The Dubliner (29) felt the game was easy as he birdied the fourth, sixth and seventh to soar to nine-under-par.
But he bogeyed the 10th, double-bogeyed the tough 11th and dropped another shot at the 12th before regrouping with birdies at the 16th and 18th.
“I was cruising,” McDonnell said after adding a 71 to his opening 66 to lead by a shot from Blainroe’s David Lally on seven-under at County Louth.
“I just thought golf was easy through nine holes and then after hitting a few bad shots to go back to one-over total for the day, the head was nearly gone.
“I thought the scoring would be lower today, so when I checked it through 13 holes, there was no one running away with it and that kept me in it then. But it’s still only halfway through.”
Lally (20) has just completed his junior year at Seton Hall University in New Jersey and he was pleased to make five birdies in a two-under 70.
“I’m happy enough so far,” he said. “I played pretty well in my last couple of tournaments in America but my scores hadn’t quite reflected that.
“I never want to put expectations on myself but I definitely was confident in my game coming into this week.”
Co Louth’s Evan Farrell and Royal Dublin’s Max Kennedy share third place on five-under after respective rounds of 69 and 71, with Dundalk’s Caolan Rafferty, runner-up for the last two years, just a shot further back.
Roscommon’s Simon Walker shot 74 but he shares 10th alongside Irish Amateur Open champion Matt McClean after he aced the 15th to record the third hole-in-one of the week.
Championship winners Colm Campbell and Hugh Foley are lurking in the group just five behind on two-under but the reigning West of Ireland champion, Carton House’s Keith Egan, missed the two-over-par cut by three strokes.
On the DP World Tour, England’s Laurie Canter claimed his maiden win at the European Open in Hamburg.
A one-under 72 gave him a two-shot win over Bernd Wiesberger and Thriston Lawrence on 13-under as defending champion Tom McKibbin shot 74 to finish six behind in eighth place and claim his fourth top-10 this season.
McKibbin will make his Major debut in next week’s US Open at Pinehurst No 2, but Pádraig Harrington won’t be there after he withdrew from today’s 36-hole US Open qualifier at Ohio State University, one of 10 final qualifying sites.
Séamus Power will try his luck at Ohio State while 2010 winner Graeme McDowell tees it up at The Bear’s Club.
The Palm Beach venue is a home club for Rory McIlroy and Shane Lowry, who closed with a third straight two-under 68 to finish 32nd in the clubhouse on four-under in the RBC Canadian Open last night.