Guernsey suffered a two-wicket loss to World League Five table-toppers Oman in Jersey and missed out on promotion to Division Four.
The teams were the top two in the table heading into the game at FB Fields.
Despite Jason Martin's 33 from 32 balls, Guernsey stuttered to 141-8 from their 50 overs.
In reply, Oman were struggling on 13-4, but Aamir Kaleem made 35 and Swapnil Khadye's 33 not out guided them to a fifth win from five games.
They now take on hosts Jersey in Saturday's final, with both sides already guaranteed promotion to World League Four in Los Angeles later in 2016.
Guernsey finished third in the six-team group but must now face Vanuatu in a third-place play-off game, with the losers joining Tanzania and Nigeria in being relegated from the World League structure into regional tournaments.