Scott Parel fired a 65 of his own to join Jeff Gove in a tie for second place at 10-under-par 206. Jamie Broce followed at 8-under-par 208.
Toledo was three shots back to start the day on the Upper Course and made his move on the front nine with a birdie at the par-5 second and another birdie at the par-3 fourth. Toledo then birdied the par-3 sixth and added a birdie at the par-4 eighth to reach 10 under around the turn.
The 42-year-old from Mexico kept on rolling with a birdie at the par-3 10th. Toledo played his third shot inside 7 feet for a birdie at the par-5 14th and converted a short birdie putt at the par-5 17th to extend his lead to three strokes with one round to play.
'Today was good. I had a lot of fin,' Toledo said. 'I hit the ball terrific. The crowd was having a good time and I just tried to enjoy myself.'
Parel rocketed out of the gate with birdies on each of his first three holes. He found trouble with a bogey at the par-4 fifth, but countered with birdies at the seventh and ninth holes.
He added a birdie at the 14th and collected an eagle at the 17th for his share of second.
'I felt like I had a day like this in me,' said Parel. 'I felt a lot more comfortable on the course today.'
Gove birdied the second and tallied an eagle at the par-4 seventh to move to seven-under. He followed with a birdie at the par-5 ninth and ran off back-to-back birdies starting at the 14th for a round of 66.
'I told my caddie it was going to have to be a perfect shot,' Gove said of his eagle on the seventh. 'It landed just like I wanted and I watched it spin right back into the hole. Finally I got a break and that carried me throughout the day.'
Jason Gore, who held a share of the 36-hole lead at the U.S. Open, carded a 68 to join overnight leader Bubba Dickerson, Jason Dufner and Jay Don Blake at 7-under-par 209.
Richard S. Johnson, Matt Weibring, David Morland IV, Rick Fehr and David McKenzie share ninth place at 6-under-par 210.