Morecambe’s Premier League ace went down 10-7 to Rob Cross in Hasselt, Belgium as his challenge was hampered by injury on Saturday.
Cross was always in control after winning the opening two legs and five of the first six, which included a 120 checkout and a neat 82 combination of bullseye and double 16.
Chisnall took three of the next four as he pulled back to 6-4, and after Cross moved 8-4 up the resort thrower claimed three in a row to reduce the gap to 8-7.
Cross, though, found an extra gear to finally close out the win, following a 13-darter with a 100 finish to seal his last eight spot.
Chisnall said: “I played Kim Huybrechts two weeks ago on the European Tour and when I was getting my darts out I pulled my back then.
“It came on after about three legs but Rob was in control anyway and I’m not blaming it.
“I battled through it and I was happy to get seven legs.”
Cross reached the final only to go down 11-7 to Michael van Gerwen.
Chisnall had defeated Spain’s Cristo Reyes 6-1 in the first round, averaging 99.51 and finishing six doubles from nine attempts.