Added additional W-2 and refund dropped significantly. Does this make sense?

Easily. It happened because you looked at the amount of your refund before your return was finished. It's a meaningless number without all the information. To see what I'm talking about, delete both W-2's from your return, then input them in reverse order from what you did before. You'll find that it's "really" your current job that's causing this to happen.

By the time you input that second W-2 your return had already accounted for all the things that reduce tax--exemptions, deductions, credits--and this was just pure income. All of those things had been reflected in the amount withheld while you were working for that employer.

Be happy that you weren't silly enough to give so much money to Uncle Sugar interest-free throughout the year.

I explain it to my multi-job clients like this: Each of us gets from the government an effectively tax free amount of income that is the Standard deduction and the number of personal exemptions you claim on the W-4. Every job you have makes two assumptions when withholding tax from your income: That you will work at the job all year and that it is the only job that you will have. Therefore the withholding from EACH job is based on you getting the Standard Deduction and the Personal Exemptions. But since you will only get those deductions ONE time on the 1040, you effectively underwithhold. Remember that every dollar of your second and third job is taxed, while only the dollars after your deductions and exemptions are taxed on your "first" job.

Please friends I understand that this is an oversimplification, but an effective one with multi w-2 clients. It leads to a great discussion of the W-4 form, and I invariably end up printing out an adjustment for their W-4 to "fix" the issue for the next year.

Tyler Franks EA with ink still wet