A late penalty sent 10-man Rovers out of the FA Youth Cup in an entertaining clash against Blackpool at Ewood Park.
A goalless first half sprang into life after the break when Finlay Sinclair-Smith found the net and the George Wilson was sent off for a late challenge soon after.
But Rovers were resolute and battled back to take the lead thanks to Hayden Carter and Jack Vale goals within 12 minutes of each other.
It looked like the young Rovers would hang on for a hard fought victory, but William Dunne bagged with four to go to equalise for the visitors.
And then, with almost the last kick of the game, Rowan Roache scored a penalty to send Rovers crashing out of the competition in heartbreaking fashion.
Dan Butterworth and Callum Dolan were the only changes to the XI from the win against Nottingham Forest in the last round, with the former out of the squad due to injury and Dolan dropping to the bench. Brad Lynch and Flavien-Enzo Boyomo replaced the pair in the XI.
In the opening three minutes, it was Blackpool who had the first chance, with Roache - a scorer in the win at Ipswich Town in the last round - smashing a free kick narrowly over Matthew Campbell's upright.
Rovers' response saw Lynch test Craig Thordarson in the Blackpool goal, who held onto the winger's strike on 10 minutes.
Moments later and Campbell had to be alert to deny Nathan Shaw, but the ball squirmed away from him and Owen Watkinson pounced before seeing Campbell in his way.
As the ball was cleared, Thomas Williams' effort from range was comfortably held by the Rovers number one, as the visitors pressed for the opening goal.
On 27 minutes the visitors cracked the bar through Roache's rasping 30-yard effort before right back Wilson produced a sensational covering challenge to deny Shaw from sticking home the rebound.
Just after the half hour mark, Watkinson brought the ball down well but lashed over the bar with his left foot.
On the stroke of half time, Wilson cut in and unleashed a shot which was sent just over Thordarson's upright as Barr's youngsters finished the half on the front foot.
After the break, Lewis Thompson attempted to beat Thordarson with a placed shot, but the Tangerines stopper comfortably save the left back's attempt.
At the other end, Jacobson's attempt from 25 yards beat Campbell and hit the post and the rebound was somehow skewed over from close range by Watkinson.
But 10 minutes into the half the deadlock was broken and it came via the right boot of Sinclair-Smith, who finished from close range after his header initially hit the bar and bounced down.
And three minutes later, Rovers had a mountain to climb when Wilson was shown a straight red card for a late challenge on Jack Newton.
Going a goal and a man down may well have hindered morale in the Rovers team, but they responded instantly through striker Carter just three minutes later.
Leaping at the back post, the defender-turned-poacher nodded home a deep Thompson corner kick to level things up just after the hour.
With 17 minutes to go, the hosts had their second in emphatic fashion, as Vale, who had a quiet game up to that point, superbly curled home from the edge of the box to hand Barr's boys the lead.
A superb stop from Thordarson denied Lynch from adding to Rovers' tally when he tipped away the attempt just a moment before the home attacker was replaced.
Watkinson headed narrowly wide with under 10 minutes to go as the visitors desperately hunted a leveller, which would potentially take the game to extra time.
Time was running out, but with just four minutes remaining, the Tangerines found an equaliser through substitute Dunne.
A lofted ball into the box found the striker at the back post and he headed into the back of the net from a couple of yards out.
It was a bitter blow for Rovers, who had certainly put in a shift following Wilson's sending off, and worse was to come for Barr's young outfit as Blackpool were awarded a penalty in injury time.
A ball was spilled by Campbell and in attempting to clear the danger, skipper Carter brought down Roache and the referee pointed straight to the spot.
The Blackpool man stepped up and confidently found the corner of the net to put his side into the semi-finals stage and send a brave Rovers side out of the competition.
The youngsters are next in action when they take on Manchester United at Carrington on Saturday 17th March, kick-off 11am.
Rovers U18s: Campbell, Wilson, Thompson, Buckley (Connell, 90), Jones, Barnes, Vale, Evans, Carter (c), Lynch (Pike, 79), Boyomo (Connolly, 61).
Unused substitutes: Eastham, Pike, Dolan.
Goal: Carter, 61, Vale, 73
Booked: Buckley, 81, Carter, 90.
Sent off: Wilson, 58
Blackpool U18s: Thordarson, Williams (Dunne, 78), Jacobson (c), Newton (O'Brien, 69), Avon, Sumner, Adarkwa, Roache, Watkinson, Sinclair-Smith, Shaw.
Unused substitutes: Simson, Maddox, Dunne, Jaaskelainen.
Goal: Sinclair-Smith, 55, Dunne, 86, Roach pen, 90
Booked: Sumner, 60