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Connect to a 5v supply direct, dont rely on the 5v reg on the mega as that cant supply enough current either if you are using a raw higher voltage to the mega.
You need a separate regulator for the esp8266 3v3 power as it draws much more current that the arduino 3v3 pin can supply hrnce the overheating of the on board regulator.search ou ams 117 3v3 800ma regulator on ebay.
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