OK. It's good that you start with a lower voltage - less heat to dissipate. (About 1.4W [2x0.68])

Problem is that the 117 wants at least 3V difference between input and and output (meaning at least a 6V supply in your case, if you set a 3V output voltage)

Strange that the diodes didn't do the trick though - each should drop about 0.7 to 0.8V at those currents... (1N400x diodes or similar)

There are low drop regulators available, that should be able to work with < 2V difference, but I don't have any part numbers at hand...

/Michael