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Gary Anderson and Michael van Gerwen joined title-holder Jelle Klaasen in making early exits from the Lakeside World Championship in Frimley Green.
Van Gerwen came to Lakeside on the back of a superb 2006
Scotland's Anderson, the second seed, was beaten 3-2 by Albertino Essers, while Holland's third seed Van Gerwen lost 3-2 to England's Gary Robson.
Earlier, England's Darryl Fitton also crashed out despite taking the first set against qualifier Phil Nixon.
Fitton, seeded seventh, lost nine legs in a row to go down 3-1.
Nixon, making his debut in the tournament at the age of 50, settled well and hit checkouts of 121 and 110 as he refused to allow the seventh seed any way back into the match.
"I felt very comfortable up there," said Nixon, from Durham, who has been trying to qualify for 20 years.
"I've been waiting 33 years, since I first started playing darts, for this and I've won at the first time of asking."
I would have been upset if I had been beaten because I felt there was a lot more pressure on me than on Michael
But Sunday's biggest upset was undoubtedly the defeat of Van Gerwen.
The 17-year-old Dutch star had come into the tournament as the bookies' favourite after a superb 2006 that ended with him beating top-ranked Martin Adams in the World Masters final.
That level of expectation, however, was too much to bear for the youngest player ever to compete in this tournament.
Robson, who won the prestigious Bavaria World Trophy in 2005, triumphed in a thrilling deciding set which went to an eighth leg under the tie-break rule.
"Mighty Mike" started well, winning the opening leg against the darts, but when he stepped up for his first leg with the throw he scored an embarrassing three single ones.
The first two sets were shared before Robson, from Northumberland, came from a long way back to break the throw and pinch the third for a 2-1 lead.
Anderson struggled once again to produce his best form
But that seemed to inspire Van Gerwen and he raised his game to win every leg of set four.
Nobody could gain a vital break of throw in the first seven legs of the decider, with the teenager distracted by a sponsor's logo on his shirt which he had to keep pushing back into place.
Robson had already missed a match dart before the eighth leg, but the 39-year-old worked his way into another winning position and this time closed it out on double four.
"When I was drawn against Michael I had a little snigger about it because he has been untouchable," said Robson.
"Everyone was saying he was going to win and they were forgetting I won a little world championship (the Bavaria World Trophy) two years ago and that I'm capable of beating anyone.
It was not a good match for me - I must learn to hit my doubles
"It was Michael's first time up there and I thought I would play seriously but also have a bit of fun.
"I tried some gamesmanship, like when he hit the three single ones I had a bit of a laugh with the crowd to try to get them on my side, but not too much to be bad sportsmanship.
"I would have been upset if I had been beaten tonight because I felt there was a lot more pressure on me than on Michael."
Van Gerwen offered no excuses and admitted it had been down to his poor finishing.
"It was not a good match for me - hopefully next time will be better," he said. "I must learn to hit my doubles."
Earlier, Shaun Greatbatch, the 13th seed, reached the second round when he beat Paul Hogan 3-1 in an all-English contest.
And in Sunday's late matches, England's fourth seed Tony Eccles beat Mark Webster of Wales 3-0, and Martin Atkins got past Gary Fenn 3-0 in another All-English clash.
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