Second round leaderboard:
-9 P Hedblom (Swe) -8 R Gonzalez (Arg), Pl Lawrie (Sco), M Manassero (It) -7 R Gonzalez (Arg), C Nilsson (Fin), A Velasco (Sp), G Bourdy (Fr)
Selected others: -2 P McGinley (Ire) -1 JM Olazabal (Sp) +1 T Hamilton (US) +2 S Garcia (Sp)
Garcia had two early birdies in round two but the 17th proved crucial
Local hero Sergio Garcia failed to make the cut on his return to tournament action at the Castello Masters.
Garcia, 30, who learned to play on the Meditarreneo course, was in his first event for two months but double bogeyed 17 in his 73 and missed out by a shot.
However Jose Maria Olazabal, in only his second event of 2010, was three shots better at one under after a 68.
Scotland's Paul Lawrie rallied to card a round of 70 and is one behind Peter Hedblom, who leads at nine under.
Joint first day leader Lawrie, the 1999 Open champion who has not won on the European Tour for eight years, began his second round at the 10th hole and after an errant start finished well with two birdies in his final three holes.
But Garcia, who helps to promote this event and won the inaugural competition in 2008, had a costly inward nine of 38, with two bogeys and a six at the 503-yard par four 17th.
The Spaniard, who reached number two in the world rankings when he won the HSBC Champions tournament in November 2008, is now ranked a lowly 68th.
Garcia again struggled on the greens and missed five putts from close range.
"It's tough for me especially missing the cut here," he lamented, after his fourth missed cut in 11 strokeplay events this season.
"The way I putted I feel as though I am back to where I was when I left the game in the summer. It's very frustrating."
But it was a welcome return to form for Hedblom, who currently lies 98th on the European money list and has missed the cut in six of his last 11 tournaments.
He also began round two at the 10th and carded six birdies and an eagle before finishing with a dropped shot after missing the ninth green.
"This has not been a good season for me," said the 40-year-old Swede, who won the last of his three European titles in 2009 with the prestigious Johnnie Walker Championship at Gleneagles.
"If I knew why I would have tried to fix it, so it was quite unbelievable how well I played today," he admitted. "And it would be great if I could keep it going over the weekend."
Sweden's Alexander Noren recorded a hole-in-one at the 200-yard par three sixth when his tee shot bounced two feet from the pin and rolled into the cup.
Noren also had five birdies in an eventful second successive round of 68 that leaves him only three shots off the pace.