Melbourne aren't giving up on a maiden Super Rugby finals berth despite blowing a golden chance to take control of the Australian conference.
The Rebels led the front-running Waratahs 26-17 with just over 10 minutes to play at AAMI Park, but the visitors ran in two tries for a 31-26 victory.
Even the Waratahs conceded Melbourne were the better team for much of the match, with both late tries coming from intercepts.
That gave them a four point buffer on the Rebels with two rounds to play before the finals.
Melbourne next take on the Reds in Brisbane before a tough haul to Dunedin to face the Highlanders, who will also be chasing a playoff spot.
"It hurts to not win and it especially hurts to not win against the Waratahs," Rebels coach Dave Wessels said.
"But our season is very much alive, especially if we keep playing like that."
The three conference winners plus the next best performed team host the quarter-finals against the four next best "wildcard teams", based on total competition points.
While this round is still to be completed, the Rebels currently sit seventh and can't drop below eighth.
Wessels said all they could control was how they played.
"I really feel over the last two months we've got better every time we've played," Wessels said.
"If we're lucky enough to make it into the playoffs and we're continuing to get better every week, who knows what's going to happen."