The Red Sox ace-turned-closer argued his way out of a potential misstep at first base, but the Tampa Bay Devil Rays held on for a 3-1 victory and sent Boston to its sixth loss in seven games.
When New York beat Texas later Monday night, the Yankees moved into first and the Red Sox fell into a second-place tie with Baltimore, one-half game back.
"Do we get a prize if we're in first place tomorrow? No," Boston outfielder Trot Nixon said. "It's not the end of the world. It's just frustrating right now."
The Red Sox failed to recover from an intense weekend series with archrival New York, which won three of four. Boston, which had been alone in first place since June 24, lost three of four to the Orioles going into the All-Star break.
The Yankees beat Texas 11-10 and Baltimore beat Minnesota 3-2 in 11 innings on Monday night, leaving New York atop the division it has won seven consecutive years.
"That will take care of itself if we start playing better," Boston manager Terry Francona said.
The last-place Devil Rays won a lackluster game that sparked to life in the top of the ninth, when Julio Lugo hit a grounder to first and Schilling went to cover the bag. First base umpire Dana DeMuth ruled that Schilling beat the runner, but he thought the pitcher missed the bag and called Lugo safe, allowing a run to score.
"I assumed the whole foot missed the bag, so I banged him safe," DeMuth said. "I wanted to make the right call."
Schilling argued the call, prompting DeMuth to summon home plate umpire Laz Diaz. Diaz said he saw Schilling touch the base and the call was overturned, ending the inning and taking the run off the board.
The Red Sox left the field as quickly as possible, but Devil Rays manager Lou Piniella was enraged and he stormed out of the dugout.
"Dana DeMuth, he's six feet away from the bag. And then you've got a home plate umpire who's 90 feet away and sees it better than the guy at first base? It's hard for me to believe," Piniella said. "You've got one base to call. Make the call and stand by it."
Piniella was quickly ejected in the ensuing argument and had to be held back by first base coach Billy Hatcher.
"Whoooo!" Hatcher said. "I've got to get back in the weight room. That's a strong man."
Scott Kazmir (4-7) overcame control problems and held Boston to three hits before three relievers pitched three hitless innings. Johnny Damon was 0-for-5, snapping a 29-game hitting streak that was the longest in the majors since Albert Pujols hit safely in 30 straight in 2003.
"I'm definitely disappointed, but Kazmir shut us down," Damon said. "Most importantly, the team's got to start a winning streak."
Despite winning the argument, the Red Sox could not score off in the bottom half off Danys Baez, who got Damon to line out to right to end the game and earn his 17th save.
Schilling, working as a reliever because of the slow recovery of his famous ankle injury, struck out two in a scoreless ninth.
Kazmir walked six to bring his AL-leading total to 62, striking out seven and allowed just one unearned run. He walked three in the first as the Red Sox loaded the bases twice but managed just one run.
"I was a little bit rusty in the first," said Kazmir, who hadn't started since July 8 because of the All-Star break. "I had 10 days off. It was just getting the kinks out."
Wade Miller (2-4) allowed three runs, six hits and three walks in 5 2/3 innings, striking out four to remain winless in his last eight starts. He sandwiched two walks around Jonny Gomes' single to center, then Gathright singled past a diving third baseman Bill Mueller to make it 3-1.
- LF Manny Ramirez went into the scoreboard during a mound visit by the pitching coach and barely made it back onto the field before Miller's next pitch.
- The Devil Rays, the worst road team in the majors, have won three in a row on the road for the first time since last August.
- The Devil Rays have not won a series in Fenway Park since 1999. They are 0-12-3 in series in Boston since then.
- The Red Sox put 2B Mark Bellhorn on the 15-day DL with a sprained left thumb. Bellhorn hurt his thumb diving for a grounder in Sunday night's game against the Yankees. Kevin Youkilis was recalled from Triple-A Pawtucket.
- Ramirez, who went 0-for-3, is 0-for-11 against Kazmir.