The pre-tournament favourite was 10 shots adrift of leader Mikko Ilonen after the Finn reeled off five birdies in his last seven holes to fire a course record 64.
McIlroy struggled at his home tournament a day after announcing he would play for Ireland at the 2016 Olympics in Brazil, carding six bogeys and three birdies.
The twice major winner, who was joint 23rd at the U.S. Open on Sunday, is this week looking to move to the top of the Race to Dubai money list and back into the top five of the world rankings.
"I drove the ball great and got in the positions that you need to but I short-sided myself a couple of times, hit a couple of loose shots with my wedges and could not get a putt to drop," Northern Irishman McIlroy told reporters.
"I was pretty sloppy with the scoring clubs so I might head to the range this afternoon to work on those. I need to do better tomorrow to be here for the weekend."
Ilonen, a triple European Tour winner, was two strokes ahead of Swedish pair Robert Karlsson and Magnus A Carlsson and Germany's Marcel Siem.
"It was a slow start," said the Finn. "The first four or five holes I felt like I couldn't get anything going.
"But I stayed patient and then the birdies kept coming especially at the end."
Former U.S. Open champion Graeme McDowell returned a 68, one stroke better than triple major winner Padraig Harrington.
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- Mikko Ilonen