Dario Castelo's side remain in third place following the loss.
Athlone Town slumped to a 2-1 defeat to Cobh Ramblers over the weekend.
Dario Castelo's side took an early lead, thanks to a Dean Ebbe penalty, but that was cancelled out by a Cobh penalty only ten minutes later.
The visitors followed that up with a second goal in the 72nd minute.
The result leaves the Midlanders in third place in the First Division standings, two points behind second-placed UCD.
Laois SHC: Camross And Borris In Ossory Kilcotton Play Out Thriller
Their game racked up 7-48 during the 60 minutes played.
Stuart Grehan To Compete At Walker Cup
The Offaly man will be in action next month.
Offaly SFC: Rhode Keep Up Unbeaten Start
The 31-time champions were comfortable winners over Edenderry.
Westmeath SFC: The Down's Secure First Win Of Campaign
They defeated Mullingar Shamrocks on Saturday.
Athlone Town Suffer FAI Cup Exit
Waterford proved too strong in the end.
Offaly SFC: Ferbane Record Statement Win Over Tullamore
Last season's beaten finalists were four point winners over the reigning champions.
Alexis Strickland Strikes Late Winner For Athlone Town
Town keep their place at the top of the Women's Premier Division.
Shane Lowry Struggles In Memphis
The Offaly man endured a difficult weekend.
Athlone Town Looking To Extend Lead At Top Of Premier Division
Town sit three points clear at the top of the league standings.
Offaly SFC: Rhode Aiming For Back To Back Wins
Edenderry are looking to avoid four defeats on the bounce.
Shane Lowry Steady As McIlroy Battles To Make St Jude Cut
Lowry is four shots off the lead.
Laois SHC: Clough Ballacolla Looking To Continue Winning Form
They take on Abbeyleix St Lazarian's this Sunday.
Padraig Horan's Funeral To Take Place Tomorrow
The former Offaly hurler died earlier this week at the age of 76.
Athlone Town Aiming To Reach Next Round Of FAI Cup
Waterford are Town's opponents tomorrow evening.
Shane Lowry And Rory McIlroy In PGA Action
Lowry tees off at 4:30pm this afternoon.
Westmeath SFC: The Down's Looking To End Run Of Draws
Dermot Power's side have drawn their opening two games.
It's Been A Difficult Season For Williams - Patrick Harding
The season returns on Sunday week.
Westmeath SFC: Coralstown Kinnegad Aiming To Continue Positive Start
Last season's finalists are unbeaten after two games played.
Midlands Athletes Impress At National Masters Track And Field Championships.
The championship took place last weekend.
"A Man Of Decency And Integrity" - Padraig Horan Passes Away At 76
The St Rynagh's man led his club to Leinster and All Ireland glory.
