Stand-in striker Gareth Sheldon dumped Albion out of the FA Cup.
His 76th-minute header put Scunthorpe through to a third round draw with Manchester United and Co.
It also sentenced the Seagulls to only their second defeat in 20 outings.
Sheldon, pushed up front to deputise for banned top-scorer Guy Ipoua, flicked home a free-kick from Andrew Dawson.
The goal came just as a Withdean replay was looking inevitable, with both sides struggling to carve out chances.
They were each reduced to ten men in injury time.
First Albion's equalising hero Bobby Zamora was sent off for a second bookable offence, then Scunthorpe's Icelandic midfielder Bjarni Larusson followed suit.
It was a dramatic finale to a cracking tie, especially in the first half, when Albion had the edge despite falling behind.
Skipper Steve Torpey slotted Scunthorpe ahead from the rebound in the sixth minute after Peter Morrison's shot from long range had struck the angle of post and crossbar.
Albion's response was impressive and it was that man Zamora again who put them level nine minutes later.
The teenage wonder boy headed in his 16th of the season and sixth in his last four appearances from a Paul Watson cross.
That seemed certain to earn the Seagulls a second chance until Sheldon pounced out of the blue.
Both teams also had three players booked in a fiercely fought affair.
Boss Micky Adams used all three of his substitutes in the second half including Andy Crosby, whose late introduction saw Danny Cullip thrown up front.
But it was the last-gasp dismissals of Zamora and Larusson which provided the talking point for a crowd of 3,879 at Glanford Park.
Referee Bill Jordan was surrounded by furious Albion players after the final whistle.
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