Tied 3-3 with North Harbour at fulltime, the game went to a shootout and it was Harbour which prevailed. Southern takes a point from the match and remains on track for a place in the semifinals.
But the Dogs will have to continue without veteran defender James Nation. The former Black Stick was hit in the face by the ball while defending a penalty corner and will miss the remainder of the tournament.
''He got a drag flick straight on to his face and has a broken nose, so he is out,'' Southern coach Dave Ross said.
''He is such an important part of our team. Others had to step up and the boys did well in his absence. But obviously it is a tough road now.''
Southern played catch-up for most of the match. The Dogs trailed 1-0 until Chris Ashton found an equaliser before halftime.
Southern fell behind twice in the second spell and both times striker Hugo Inglis struck to give his side parity. With eight minutes remaining the sides were locked 3-3.
''It was one of those games which was always going to be tight,'' Ross said.
''We had our opportunities but it just didn't go our way. Harbour are a good side so it was a good performance.''
Southern will play Auckland today. The blows keep coming for the Southern Women.
It crashed to its fifth consecutive loss yesterday, losing 3-2 to Northland.
The good news is Southern finally scored a couple of goals and was much more competitive. It had been kept scoreless in the previous four games.
Northland opened the scoring in the eighth minute but talented striker Pip Symes was on hand to reply for Southern just before the end of the half. A deflected shot fell nicely for her and she drove the ball into the net with a reverse stick.
Southern scored first in the second spell. Emma Spratt finished off a rehearsed move from a penalty corner but Southern tired and the game opened up.
Northland found an equaliser with five minutes to go and Black Sticks striker Charlotte Harrison fired in the winner with less than a minute remaining.
''It was pretty gut-wrenching stuff after 69 and a bit minutes,'' coach Sam Brown said.
''We had a few opportunities and could have probably put the game away.''
Southern's next match is tomorrow against competition front-runner Auckland.