Starting on the back nine, Wall had a hat-trick of birdies from the 11th and on six under par shared top spot with five-time Japanese Tour winner Tetsuji Hiratsuka.
Wall was level with two holes to play after the Sicilian Open spilled into an extra day, but double-bogeyed the 17th and lost by one to France's Raphaël Jacquelin.
Hiratsuka, 39, is playing on a sponsor's invitation and because of his record at home had been paired with Spanish stars Alvaro Quiros and tournament promoter Miguel Angel Jiménez.
They are the two members of the world's top 50 in the field - Hiratsuka is 83rd - but both were in a battle to survive the halfway cut.
The axe was expected to fall at level par and after five holes Quiros and Jiménez, looking for some form two weeks away from The Masters Tournament at Augusta, were one over.
Australian Richard Green, who would have an outside chance of qualifying for the opening Major of the season if he won on Sunday, birdied the 10th and 12th to climb to one over, but a bogey six two holes later was a big setback to his hopes.