Everton were masters of their own undoing in a bizarre match which Blackburn Rovers won easily despite having few shots and little possession.
David Moyes was looking for a boost in this FA Cup third round tie after last week's poor defeat at Manchester City.
The Scot was seeking the kind of form his team displayed in the post-Christmas rout of Newcastle United but it was always going to be difficult against an in-form Blackburn side.
With five wins out of the last six games, Mark Hughes' side arrived at Goodison well capable of turning over the Toffees.
Victor Anichebe replaced the injured James Beattie and Andy van der Meyde came in for Simon Davies for Everton.
For Rovers, youngster Matt Derbyshire kept his place after his debut goal at Wigan Athletic, while prolific hit-man Benni McCarthy had to make do with a place on the bench.
Derbyshire opened the scoring on five minutes after a horrendous comedy of errors in which Van der Meyde was easily dispossessed after dallying on the ball, and Tim Howard spilled a tame Morten Gamst Pedersen shot to leave the youngster a simple tap-in.
Minutes later Everton were denied a blatant penalty after Andy Todd handled under pressure from Lee Carsley. The home crowd let the referee know their displeasure.
Mikel Arteta should have done better on 14 minutes when he blasted a smart Andy Johnson pull-back over the bar.
Another penalty claim was dismissed as Arteta was brought down after leading the Blackburn defence on a merry dance.
Everton were looking far and away the better side but it was Rovers that scored again after the referee awarded a free-kick 30 yards out. Pedersen's sweet effort left Howard flapping at thin air as the ball struck the back of the net.
Carsley's 26th-minute shot sailed agonisingly over the bar as Everton refused to roll over.
However, Paul Gallagher finished Everton off in the 38th minute with a sublime turn and shot against the run of play yet again.
Everton were shell-shocked after dominating the entire half but finding themselves three goals behind at the break.
The second half was much the same as the first with Everton controlling possession but not often threatening Blackburn's goal.
Todd, Stephane Henchoz and Jay McEveley shackled Arteta, Leon Osman and Andy Johnson effectively as Blackburn showed little inclination of letting Everton back into the game.
Aaron Mokoena pole-axed Arteta to allow Johnson to put away his penalty in the 68th minute and add some sort of respectability to the scoreline.
When McCarthy's stoppage-time goal made it 4-1 after 45 minutes of solid Rovers defending, it summed this game up better than any sport hack ever could.