256 x 0.060A still equals 15.4 amps. Not 1.54A. So you are doing 256 * 6mA (0.006). Explains a bunch.
You will need to provide model number of your display and a picture of you testing it. Based on the photo in post #16, it is impossible for Vcc of the display to be different than Vcc of the Arduino, and the Arduino will NOT work at 3.5V. Using one supply, it is impossible for the the 5V pin of the Arduino to be different from the Vcc for the display if they are directly connected together. Therefore the wiring you describe is not what you actually have. A picture is worth 1000 words.