British duo Nathan Robertson and Jenny Wallwork lost to Indonesia's Danny Bawa Chrisnanta and Yu Yan Vanessa Yeo in round two of the Malaysian Open.
The British pair had beaten compatriots Chris Adcock and Imogen Bankier in round one on Wednesday - a major boost in the battle for an Olympic place.
But they could not build on that strong start, going down 21-13 21-17 to Chrisnanta and Yeo on Thursday.
Robertson and Wallwork defend their English national title next month.
They are currently the third-ranked British mixed doubles pair, behind Adcock and Bankier and Gabby White and Robert Blair.
Only the highest-ranked British pair are guaranteed a place at this summer's Olympic Games in London, unless the second-ranked duo are also in the world's top eight.