Local favorite Jerry Kelly carded an even-par round of 70 to head a group at 7-under-par 203. The Wisconsin native was joined by Brenden Pappas, Heath Slocum, Steve Allan, Patrick Sheehan and overnight leader Jay Don Blake.
Perry was four shots off the lead to start his round and jumped out of the gate with a birdie on the opening hole at Brown Deer Park after his 8-iron landed a few inches from the cup. He found trouble with a three-putt bogey at the third but recovered with another tap-in birdie at the par-3 fifth.
The 42-year-old stumbled again with a bogey at the par-4 eighth to pick up little to no ground around the turn.
The inward half was a different story for Perry, however. He picked up a birdie at the par-3 11th and added a birdie at the 15th to reach 6-under.
Perry then birdied the 16th and hit his second shot inside 10 feet at the par-4 17th. Perry drained the birdie putt to make it three in a row and secure the outright lead.
'It was a pretty mellow kind of day. Nothing was happening,' said Perry, who is looking for his third win of the season. 'I just couldn't get anything going and then I made four birdies and looked up and was in the lead. It was an odd day.'
Blake had problems early with two bogeys over his first eight holes but tallied a birdie at the ninth to make the turn at 7-under.
At the par-4 16th, Blake ran home a birdie putt from the fringe to match Perry at 8-under. Blake bogeyed the very next hole, however, to fall back into the logjam at 7-under.
Kelly battled mightily to stay near the top of the leaderboard. He had two bogeys over his first seven holes but returned to even-par with birdies at the ninth and 13th.
He hit a bad tee shot at the par-3 14th en route to a bogey but was able to recover at the closing hole. Kelly rolled in a 15-footer at the 18th for a birdie to finish one shot back.
'I was lucky nobody made a big move. I was surprised at that,' said Kelly. 'I know my game is good enough. Now I just have to go out and execute. Kenny is definitely the man to beat.'
Pappas played the back side first and collected four birdies over his first nine holes. He added a birdie at the fourth and ran off back-to-back birdies from the sixth en route to a 63, the lowest round of the week.
Shigeki Maruyama, who won this event in a playoff in 2001, shot a 69 to finish alone at 6-under-par 204.
Loren Roberts, a two-time champion of this event, was one shot further back at 5-under-par 205 along with Harrison Frazar, Todd Fischer, Tommy Armour III, Joel Edwards and Brett Quigley.