Palace’s FA Youth Cup dreams ended for another year in cruel fashion as they were beaten 5-4 on penalties by Liverpool after running the Reds so close.
Levi Lumeka opened the scoring from the spot before Palace were pegged back, and a goal in extra-time for the hosts looked to have put them in the driving seat for a spot in the fourth round before Kian Flanagan netted to set up the shootout.
The hosts made a bright start to proceedings, with Curtis Jones seeing an effort deflected just past the post before Oliver Webber palmed away a Glen McAuley header, but after withstanding the early pressure the Eagles were gifted the chance to take the lead when Lumeka powered into the area and Diego
Lattie grabbed a handful of his shirt to foul the attacker, who would make no mistake from the subsequent penalty as he beat Kamil Grabara.
Paddy McCarthy was dealt a blow when Webber was forced off at half-time through injury with Colm McAdden taking his place in goal, and he was quickly called into action by making superb saves from McAuley and Rhian Brewster headers early in the second period.
However he was finally beaten at the third attempt when Conor Masterson broke away and found Jones who bent the ball around the Palace keeper and into the top corner of the net to level the scores.
McAdden would continue to be busy and he was forced to deny Brewster twice more to ensure the game went into extra-time, but it took just two minutes of the additional half an hour for Toni Gomes to race onto a loose ball before tucking the ball away.
Once again, Palace would come back and after seeing their chances of finding an equaliser boosted when Liam Coyle was dismissed for a second bookable offence, they began to enjoy plenty of pressure and eventually Flanagan got a sight of goal which he took to take the game to a penalty shootout.
However it would be Grabara rather than McAdden who was the hero, as the Polish stopper denied Victor Fundi and Tariq Ossai before McAuley scored the crucial kick to eliminate the Eagles.