Goshen looked set to win the JCB Triumph Hurdle heading into the final hurdle when 10 lengths ahead from the rest of the field.
However, a mistimed jump unseated rider Jaime Moore and left the gate open for Burning Victory to steal the win for trainer Willie Mullins and jockey Paul Townend.
"I just feel very sorry for Gary and Jamie," Mullins said on ITV Racing after the race.
"Jamie did everything right and rode the perfect race. He had the race in the bag and asked the horse all the right questions at the last, but the horse didn't answer and he just got unbalanced.
"I'm delighted we've won for our owner, but I feel hugely for Gary and Jamie - a father and son team. I know them fairly well, this was their one shot at a winner at the Festival and the work was done.
"I was just thinking of myself and Patrick and we've been there with Ruby as well. I know what it feels like. It's not a victory I'm going to celebrate hugely - we got the rub of the green.
"She's not the best jumper in the world. She jumped the first two great, but missed the two down the back and Paul knew the race was over. He was riding to maybe get into the money if he could.
"She has a huge engine and hopefully she can brush her jumping. She'll probably go back to Fairyhouse now."