Kazakh Alexandre Vinokourov upset Britain's plan to set up a massive sprint finish for Mark Cavendish when he claimed the gold medal in the road race.
Colombian Rigoberto Uran took silver with Norway's Alexander Kristoff coming home third to win the bronze medal eight seconds behind.
Vinokourov was part of a 32-man group that the British team failed to rein in on the way back to central London from Box Hill.
Britain, brimming with confidence before the event, controlled the race all day but it proved too much of an effort for the four men who were looking to bring Cavendish home.
Tour de France runner-up Chris Froome dropped out with about 30 kilometres remaining, leaving Cavendish with only three teammates. It was then Tour champion Bradley Wiggins's turn to drop out exhausted.
David Millar took massive turns in front of the peloton as the gap floated around the minute. Cavendish finished 29th, 40 seconds behind Vinokourov.
Vinokourov announced he quit professional cycling after crashing out of the Tour de France last year, but could not resist the urge to get back on the bike.
The once-mighty Chinese men's team were left nursing sore egos after they endured a bumpy start to the defence of their gymnastics title. China were led by the 2008 survivors Chen Yibing and Zou Kai from a contingent that won seven out of eight golds in Beijing.
They had been expected to top the opening session of men's qualifying having been unbeaten on the world stage for eight years. Instead, they were usurped by hosts Britain, a nation who have not won a team medal of any colour for a hundred years.
Britain took pole position in early qualifying with 272.420 points, a 2.435 advantage over China. Title challengers Japan and the United States were set to compete later in the day.
China's Li Na crashed out of the Olympic tournament in the first round as the world No 11 was beaten 6-2, 3-6, 6-3 by Slovakia's Daniela Hantuchova at Wimbledon.
Li had been China's best hope of taking a medal in the singles, but the former French Open champion struggled to find any momentum against the big-hitting Hantuchova and was knockd out in one hour and 42 minutes.
The defeat completed a dispiriting month for the 30 year old, who also suffered a surprise Wimbledon second round exit against Sabine Lisicki.
Li, who became the first Chinese player to win a Grand Slam when she triumphed in Paris in 2011, made 24 unforced errors and served five double-faults.
South Korean marksman Jin Jong-oh overcame a suddenly nervy ending to win the 10-metre air pistol gold medal and improve on his silver in Beijing. Jin, who took a two-point lead into the final, appeared set to cruise home as he increased his lead to four halfway through the 10-shot final.
But four straight 9-rings cut his lead to less than two. Then he pulled off the best score of the final, a near-perfect 10.8, to leave no doubt. He raised his arms in silent celebration as others were yet to finish.
Hungarian fighter Eva Csernoviczki bounced back from being strangled unconscious to claim an unlikely bronze medal in the women's under-48kg competition. Csernoviczki was rendered unconscious as she tried to resist a strangle in her quarter-final loss to Belgium's Charline van Snick.
The bout was awarded to Van Snick, while the slumped Csernoviczki's arm started shaking before she regained consciousness. Having lost in the quarter-final she was given a second medal chance in the repechage.
She beat China's Wu Shugen and then stunned world No 1 Tomoko Fukumi with a foot sweep in a sudden death golden score period to earn a podium finish along with Snick. Sarah Menezes took the gold for Brazil while Alina Dumitru of Romania bagged the silver.
New Zealand's Hamish Bond and Eric Murray set a new men's pairs rowing world record in the heats, smashing the mark held by Britain's Matthew Pinsent and James Cracknell.
The multiple world champions timed 6min 8.50sec on the first day of competition, almost six seconds quicker than the 10-year-old record set at the 2002 world championships but were assisted by the weather.
"When we were warming up, we saw there was a nice tailwind and some fast times. Yeah, they were fast conditions but we didn't really have an inclination of how fast we were going," said Bond. The duo, who are unbeaten since teaming up in 2009, are now safely into the semi-finals.
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