barring infusing an exotic, if the light level is more than 20 different you get diminishing returns on the infusion (it doesn't go straight to the base power level of the piece of gear you infuse into it). So if I'm understanding you correctly, you infused a 265 Uriel's Gift with a 296 Coldheart. Since Uriel's Gift is not an exotic, you experienced diminishing returns.

You either have the names or numbers mixed up or both. If I understood you correctly, you infused your Uriel's Gift with a Coldheart? If you infused Uriel with CH, then it's impossible to still have the CH because it's used as infusion fuel. Unless you had a duplicate at lower PL. It would help if had exact numbers and names. EDIT: As an example: If we have a Uriel's Gift at 260 and infuse it with a 296 Coldheart, the Uriel's would become 291 (like you noted, -5 for the mod). If the Uriel's had a mod on it too, it would've become 296.