here is my circuit/breadboard.. I do 'not' think its my circuit..as once the PSU is dialed down... it starts working?
It's your circuit design. Look at a datasheet for your specific voltage regulator for typical applications, it will show two capacitors wired from ground to both the input and output terminals of the regulator. Your regulator is most likely oscillating, but your meter won't show that as a oscilloscope is required to see it. Anyway find and wire in the recommended regulator capacitors and I bet all will be fine.
Lefty