Valley exited the Isuzu FA Trophy on penalties at Worcester City after coming from two goals down.
Worcester scored with their first three penalties while Rugby's midfield trio of Caine Elliott, Olly West and Callum Griffin all failed with theirs, after Elliott had halved City's early two-goal advantage five minutes before the interval and West had struck late into added-time to take the game to a shoot-out conclusion.
Town boss Grant Joshua had shuffled his pack for the fixture at the expansive Sixways Stadium - making five changes from the side that had lost against Boldmere in the league earlier in the week, with new signing Max Martin straight into the side in midfield, and Marcus Bald, Ethan Hanson, Isaac Adegoke and Cairo Taylor all recalled to the starting line-up.
The hosts started brightly in strong, high winds, with Shay Palmer and Liam Lockett both looking lively performers down their right-hand-side.
Elliott did send in one dangerous cross for Rugby though, but Derby County loanee keeper Harley Price competently claimed it, meanwhile at the other end a Felix Miles cross ended up on the roof of the net.
The opening goal came from a corner on nineteen minutes when Marcus Bald failed to claim a corner under pressure, and after Nathan Hayward could not put the loose ball over the line, Dan Sweeney made no mistake by bundling home from close range.
It was soon two in a very different fashion when Sweeney teed himself up in the box before executing an excellent overhead kick into the corner from eight yards.
With the hosts choosing to sit back and defend their lead, Valley started to find their way into the game a little more.
They nearly got their reward from a corner, but Price did well with a decent point-blank to deny Ethan Hanson, before City were able to hurriedly clear the ball away from the goal-line.
An Elliott delivery into the box then found the head of Josh Thomas but he was not able to make a true contact on it, as Valley probed further, although both Miles and Paul Downing then had chances that missed the target.
A quick counter attack did get Rugby back in the game on 40 minutes though, when Adegoke intercepted a Worcester attack with Elliott carrying the ball into opposition territory and after Rivel Mardenborough set up Taylor in the area, his low shot was parried with Elliott on hand to head in the rebound.
Thomas headed another Elliott set-piece delivery over the bar not long after the restart, as Town continued to enjoy more of the ball than their higher-level opponents. City threatened occasionally on the counter though, and Hayward struck a post with Bald beaten.
The arrival off the bench of Stan Anaebonam almost gave Town an instant pay-back, after Mardenborough's excellent touch and through ball released his strike partner, but Anaebonam's own touch forced him wide and then his shot from a tight angle was comfortably dealt with by Price.
Miles poked one wide after Bald had misjudged his foray from the line, but the Town keeper then made amends with a good stop from a thunderous effort from Worcester sub Zac Guinan.
Guinan fired another strike straight at Bald, as the game opened up in its closing minutes, before Rugby's bravery finally paid dividends when Elliott's short corner found Bleu McNeil whose excellent cross was brilliantly glanced into the top corner by West via the underside of the bar.
Despite the late drama of the equaliser, the shoot-out was a damp squib for Valley, with Price saving Elliott and Griffin's efforts from twelve yards, and West sending his way over the bar and into the compound behind the goal.
Miles, Guinan and Teddy Rowe all successfully converted their penalties for Worcester to ensure it was Town who exited the competition despite their valiant efforts.
Valley
Line-up: Bald; McNeil, Thomas, Hanson; Tye, Lundoloki, Elliott, Martin (Griffin 63'), Adegoke (West 78'); Mardenborough, Taylor (Anaebonam 63'). Subs not used: Sahota, Nee. Booked: McNeil.
