Cut the 5V usb wire to isolate Arduino power supply

I have an Arduino Mega2560 that is driving a bunch of TTL/HCT circuit boards, a bunch of LEDs and eventually a dozen or so solenoids. Everything operates at 5VDC. Up to now all power has come through the USB cable and the Arduino. As I've been building out the system I've started to notice some strange behavior so I checked the 5V supply line. It was 3.8V. The USB obviously can't supply sufficient power for the whole system. I have a regulated 5VDC supply that will power the system once it is disconnected from the PC. I'm considering cutting the 5V wire in the USB cable to isolate the Arduino supply from the PC and powering the system with the regulated 5VDC supply so I can monitor software behavior. The Arduino would have to be powered through the 5VDC and ground pins.

Has anyone tied a similar solution to this problem?

You're describing a powered USB hub.

The Mega has a self-healing onboard 500mA? USB fuse, so keep the current below that.
It would be wise to power the "extras" from a separate supply.
Post a diagram of how you think you should hook it up.

Attached is a sketch that shows the current and proposed wiring arrangements for my system. The current arrangement is obviously suitable only for software development. The preferred arrangement simulates the final installation - USB cords are cheap and I have plenty sitting around unused. A second possible approach would be to supply the system separately and let the USB bus continue to supply the Arduino. It would be a simple matter of plugging the power leads back into the Arduino 5VDC and Ground pins when the PC is detached. I have a 7.5 VDC regulated supply on my bench, but this sdoesn’t seem like a reasonable approach.

I’d like to know if anyone has successfully tried either the preferred or possible approaches. I’d rather not smoke a board if it can be avoided.

I think the 'conventional' way is the one you have marked as 'Possible' - that is your Arduino is powered via the USB port but the rest of the system is self powered.

When you implement the solution you then have to bring back a 5v supply to the 5v socket on the Arduino board.

You could also program the Arduino to check the 5v via an analog port and alert you when things were not right. A simple flashing LED would suffice, probably.