John Jacobs, the reigning Senior PGA champion, posted a 6-under 65 to climb to 10-under-par 132. He is tied there by Keith Fergus, who carded his second straight 66. D.A. Weibring is two strokes further back at minus-8.
Hatalsky, who closed his first round with back-to-back birdies, opened his second round with three straight birdies to climb to minus-9. However, he stumbled to a double bogey at the fifth.
'I lost my ball in a tree on the fifth hole,' said Hatalsky. 'And never found it. I could have really gotten upset, but my attitude remained good even though I was erratic with my ball striking.'
The 52-year-old fought back to birdie the 7th and 10th to return to minus-9. Hatalsky closed with birdies at the par-5 15th and par-5 18th to grab a share of the lead.
'I feel pretty fortunate to be in this position,' Hatalsky said. 'It was a day I scrambled, made some putts and held on with my short game.'
Purtzer, who opened with a course record 60 on Friday, played well until late in his round. He birdied the second and fourth to get to 13 under.
He dropped a shot at the eighth, but caught fire around the turn. Purtzer rolled in three straight birdies from the 10th to get to 16 under, which gave him a six-stroke lead.
Things went down hill from there though. He double bogeyed the par-3 13th and dropped shots at the 16th and 17th to finish his round at even par for the day.
'Nothing felt as good as yesterday,' said Purtzer. 'I didn't have the same feeling. It was kind of like a comedy of errors most of the day. I feel like I let everybody back into the tournament. If I'd have just shot a 67 or 68, I'd feel good going into tomorrow's final round. Now it's going to be like work.'
Sam Torrance fired a 5-under 66. He stands at 7-under-par 135 along with David Eger (69) and Bruce Fleisher (67).
Vicente Fernandez, Joe Inman, Lonnie Nielson and Craig Stadler are one stroke further back at minus-6.
Rodger Davis, the defending champion, stumbled to a 4-over 75 and stands 15 shots behind the leaders.