The loss of four wickets for 80 runs put Scotland on the back foot as they lost to Papua New Guinea by five wickets.
The Saltires raced to 45 for no loss after the end of the seventh over, helped by a hat-trick of boundaries for Matthew Cross off the bowling of John Reva.
But after captain Kyle Coetzer was run out for 22, the Scottish run rate took a dive and they failed to find the boundary in 10 consecutive overs at one point.
Cross was the stand out performer, striking 91 from 120 balls with 11 boundaries, but was caught by Mahuru Dai from the bowling of Reva with Scotland on 189 for seven in the 48th over.
Scotland failed to see out their 50 overs as Mark Watt was run out for 16 and Chris Sole caught for four as Papua New Guinea wrapped up the innings.
Papua New Guinea needed around four an over and ate into the 204-run target quickly, with the opening pair of Vani Morea and Tony Ura taking 40 off the opening six overs.
There was a glimmer of hope when Scotland removed both with the score on 44 but 49 from captain Assad Vala and an unbeaten 63 from just 54 balls from Dai saw Papua New Guinea reach their target with 12 balls remaining, meaning they leapfrog Scotland into second place in the World Cricket League Championship.