The only Indian winner ever in a PGA Tour event, Atwal is now even par 144 for two rounds and was tied 49th after making the cut on the line.
Two other players with Indian connection had contrasting fortunes. Bhavik Patel (67-70, playing in his rookie year, was soaring in tied second place with four others, while Daniel Chopra (69-76) missed the cut, which fell at even par.
Atwal had three birdies and four bogeys. He birdied second, eighth and 16th, while he bogeyed the sixth, ninth, 11th an 14th.
Brazil's Alex Rocha (71), Monday qualifier Nick Rousey (70), Tennessee's Philip Pettitt (72), Troy Merritt (72) and first-round leader Ryan Spears (73) are knotted at 5-under 139 after two trips around the Kinderlou Forest Golf Club, which measures 7,781 yards and is the longest on the Web.Com Tour.
Fan favorite John Daly rolled in a 12-foot birdie putt on his final hole late in the day to finish at even-par 144 and make the cut on the number.