It was certainly a game of two halves at Selhurst Park as Palace somehow managed to dominate the first 45 minutes before sinking to a 3-1 defeat.
Goals from Karl Duguid, Richard Garcia and a penalty from Chris Iwelumo meant that the Eagles' brief unbeaten run came to a shuddering halt. To make matters worse for the Eagles on loan goalkeeper Iain Turner was forced to make an early exit through injury.
Palace made two enforced changes to the side that beat QPR 3-0 as Danny Butterfield and Dougie Freedman, both suffering from groin injuries, made way for Matt Lawrence and Clinton Morrison. There were also returns on the bench for James Scowcroft (suspension) and Carl Fletcher (illness) while Scott Flinders got the nod from Peter Taylor for the substitute goalkeeping position.
The game got off to a frantic start with good chances for both teams within the first three minutes. Firstly Colchester striker Chris Iwelumo shot widely over the bar from 20 yards out then Michael Hughes and Jobi McAnuff forced Us' goalkeeper Dean Gerken into action.
Palace's attacking play looked to be as sharp as it was against QPR and in the ninth minute McAnuff was again denied by Gerken after a great one-two with Morrison on the edge of the Colchester penalty area. A few minutes later and McAnuff had another chance but after good work from Tom Soares on the right his shot was blocked.
Even though Palace dominated the early exchanges the Us still carved out some opportunities and in the 15th minute Iwelumo came within a whisker of connecting with Duguid's volley across goal. Then in the 18th minute Palace goalkeeper Turner made a stupendous save from Jamie Cureton's half volley, twisting and turning his body to tip a viscous strike brilliantly over the bar.
The save came at a price though as the on loan Scot was visibly in pain and had to be replaced seven minutes later by youngster Flinders. Within seconds Hughes went the close with a shot from the right of the penalty but then Cureton tested Palace's new keeper with a shot from the edge of the box and the England Under 20 international was up to the task.
The Eagles were keeping possession as well, but the Colchester defence was holding firm, but in the 39th minute Morrison had the best chance of the half. Soares' cross was headed down by Kuqi but Morrison's shot was narrowly over.
There were further chances for McAnuff, who had a shot deflected wide and and almighty goalmouth scramble involving Kuqi and a number of Colchester defenders but somehow the score remained goalless at the break.
There was a brief flurry of activity from the Colchester forwards at the start of the second-half and they always looked a threat on the break. Palace came close to taking the lead though just couldn't get the ball in the back of the net and just before the hour mark but Morrison's tight turn and shot was superbly saved by Colchester goalkeeper Gerken diving to his right.
The longer the game went on the more dangerous Colchester looked and in the 63rd minute Palace conceded a poor goal against the run of play. Izzet's cross from the right took a massive deflection forcing Flinders to tip the ball onto the bar, but Duguid was first to react, stabbing the ball into the net at the far post.
Things got worse for Palace seven minutes later as substitute Richard Garcia was allowed the freedom of Selhurst Park as he strode straight through the middle of the pitch before firing past Flinders. It was another poor goal for Palace to concede and in a game that they looked to be controlling in the first-half.
With just over 15 minutes left Taylor made his final two changes bringing on Scowcroft for Kuqi and Green for Watson, but it was Colchester who were starting to look the stronger side.
Palace struggled to keep possession and seemed to lose their way in the last quarter of an hour, but with a few minutes left the Eagles did grab a lifeline as Morrison nodded home after Hudson headed a Hughes cross back across goal. Unfortunately for the Eagles the lifeline did not last long as a few minutes later Danny Granville was adjudged to have fouled Garcia in the box and Iwelumo calmly converted the spot-kick.
Try as they might Palace could not get back into the game and they fell to their first defeat in five matches.
PALACE: Turner (Flinders 25); Lawrence, Ward, Hudson, Granville; Soares, Hughes (c), Watson (Green 73), McAnuff; Kuqi (Scowcroft 73), Morrison.
Subs not used: Kennedy, Fletcher.
Goalscorers: Morrison (86).
COLCHESTER: Gerken; Halford, Brown, Baldwin, Barker; Jackson (Garcia 61), Duguid (c), Izzet, Watson; Cureton, Iwelumo.
Subs not used: Guy, Elokobi, McLeod, Cousins.
Goalscorers: Duguid (63), Garcia (70), Iwelumo (89).
