Obviously the last diode drops worth of voltage won't be routed back, but will not cause a problem. If you measured +8V on the +5V pin with +12V connected to the barrel connector then something wasn't measured right. +8V would easily destroy the CPU.
The voltage was measured correctly. I measured the voltage when I noticed the LEDs on the arduino were noticeably brighter when connected to the +12v external supply. 9v on the external barrel connector produced ~7v on the arduino +5v pin. The arduino was not damaged, possibly due to quick detection of the difference. The original arduino external power supply setup seemed to me somewhat "tutti-frutti".