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Looking at the circuit, I would not substitute a 7805. I do not think the 723 is necessarily at fault. The circuit is very simple and I am curious if you have performed a few basic tests?
First did you confirm if it may be going into current limiting mode? What would help is when the voltage starts to droop is to measure the voltage at the regulator transistor and put the readings on the diagram.
I suspect the transistor or components around ity may be bad.
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