Ahead 2-0 at the break in the quarterfinal, the Dunedin club conceded the winning goal four minutes from fulltime to go down 3-2 to Wellington Olympic in the capital.
The Caversham side had scored its two goals inside four minutes about the half-hour mark in the match but it coughed up two quick goals in the second half, and then lost out when extra time beckoned.
Caversham was not helped by a flight delay, after travelling from Dunedin yesterday morning.
The game was delayed for one hour, and did not kick off until 3pm, as the flight the team was scheduled to catch from Christchurch was cancelled.
The team had to travel to Wellington on two separate flights.
Caversham coach Tim Horner said it was a tight game right throughout and could have gone either way.
''There was a period there for 10 to 15 minutes, when they scored their two goals, when they had us under pressure. But we came back well from that and it was pretty even,'' Horner said.
''It was just at the end there when there was a bit of a melee in the box, it bounced off a few legs and managed to land for one of their guys and he hammered it into the net.''
Big Caversham keeper Liam Little was busy throughout the match and made some good saves but he could not stop them forever.
Caversham had scored first, just before the half-hour mark, with a nice goal by Ant Hancock. It then got a second quickly, through a screaming shot from Seamus Ryder.
Both sides had their fair share of chances in the first half but there was a lack of polish in the finish of the front lines of both teams.
Horner said Caversham has shown some nice touches in the first half, stretching the home team's defence and getting in behind it. But Olympic came out firing in the second half and, after 15min, got back into the match, when Colm Kenny knocked in a header from a corner.
The home side was sniffing an equaliser and was awarded a penalty after some tight defending in the penalty box.
Jamie O'Connor stepped up and put the ball past Little to tie the game up.
Horner said the game was always going to be tough against a quality outfit but he could not fault his team for the effort it put in.
He praised the play of his strikers, Hancock and Tom Jackson, saying they did tireless running off the ball, while Ryder was busy down the right flank. Little also made some quality saves.
After Clayton Lewis had scored the decisive third goal for the host, Caversham went back on to attack. It forced a corner and had the ball cleared off the line a couple of times through some frantic Olympic defending.
Tottenham Hotspur has opened new contract talks with midfielder Gareth Bale and is confident of keeping the Wales international, despite him being linked with a move to Real Madrid, according to manager Andre Villas-Boas, Reuters reports.
''He signed a new contract last year but talks have started between the chairman and his agent and are ongoing,'' Villas-Boas told the media in Hong Kong, where Spurs are playing in the Premier League Asian Trophy pre-season competition.
''It doesn't mean there is going to be an agreement, but we are confident. The player is under contract. He signed a new contract last year. He is a special player, had a wonderful season last year and at the moment we are extremely happy with him.''
