Hmm, I had a similar issue. That +5V regulator burned out. Instead of buying a new one, I desoldered it off and I did a +5V power mod. I got a good, well-regulated +5V power supply, soldered the original tip from the old power supply on to it, and on the motherboard, I had to perform a bypass. Nice thing is I could get rid of that big heat sink and so the system runs with less heat internally (it's all at the power supply, that has such regulators inside).
So, that's what I did. Works. But for you, yeah, easiest to try replacing it. It could be the cause of the voltage drop having shorted or something. If not, there is a short somewhere else.
Here's a good link to a store for it:
http://console5.com/store/7805-5-volt-regulator.html.50 cents
Desolder it off first, and then test the incoming voltage, see if it's 10-12V after that. If so, then you know it was causing the short and hence voltage drop.