Day put together a career best opening nine holes at Augusta National and sat five under through 14 holes, before making bogey at 15, a disastrous triple bogey on the par three 16th and another bogey on the 17th to fall even on the card.
With a hole to play it left the Australian six adrift of defending champion Jordan Spieth who continued on where he left off last year by jumping to the opening round lead with a sizzling bogey-free six-under-66 in gusty winds.
Day appeared set to match Spieth when he carded a five-under-31 on the front nine holes but the wheels came off spectacularly late.
A poor wedge after laying up on 15 led to a three-putt and then his tee ball on 16 found the water.
Another missed green a hole later had him limping home towards the clubhouse.
Earlier the Queenslander began his chase in style, nailing an impressive eagle on the second hole.
Day smashed a long iron approach to 10-feet and rolled in the putt.
He then grabbed another birdie at the fifth before back-to-back birdies on eight and nine.
He was only a breath away from a hole out eagle on the ninth but gave the shot back with a three-putt bogey on 10.
A birdie on 13 put him back on track.
A year ago Spieth opened up a three-shot gap with an opening round 64 before going on to win at a record equalling 18-under.
This time around the 22-year-old birdied the third, sixth, eighth, 10th, 13th and 18th holes.
“I would have signed for two under today and not even played the round, knowing the conditions that were coming up,” Spieth said.
“Got a lot out of the round with what I felt like was kind of averageish ballstriking. Just scored the ball extremely well, which is something I’ve been struggling with this season.”
Ireland’s Shane Lowry and New Zealander Danny Lee share second at four under.
The rest of Australia’s tilt has started slowly with 2013 Masters champion Adam Scott shooting a dismal four-over-76, leaving him 10 shots off the lead.
It was only slightly better news for Marc Leishman and Masters rookie Cameron Smith who entered the clubhouse with rounds of 74.
Steven Bowditch battled away despite a wrist injury to shoot a seven-over-79.
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