Dave Chisnall became the latest player to fall at the next hurdle having beaten Phil Taylor, as he was thrashed 4-0 by Andy Hamilton, meanwhile James Wade and Gary Anderson cruised into the last eight with fine victories.
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Chisnall created history on Tuesday night with a 4-1 defeat of 15-time World Champion Phil Taylor, but his hopes of following that with his first major title were shattered by Hamilton.
The St Helens ace failed to reproduce the clinical finishing which had proved the difference against Taylor as another Stoke ace, Hamilton, took full advantage.
Hamilton now meets Kim Huybrechts in the quarter-finals on Friday afternoon, and was delighted to see off Chisnall by dropping only five legs after being taken to a deciding set in the previous two rounds.
"I was prepared for a battle and I went in there solid, but maybe this will be good for me going into the quarter-finals," said Hamilton.
"I've proven I've got the whole game to beat anybody - I came come from behind and I've won from in front. I'm on top of the world and can't wait for the quarter-finals."
Last year's beaten finalist Gary Anderson hit top gear for the first time in the 2012 tournament with a thrilling 4-1 win over Essex's Colin Lloyd.
The Scot hit a ten-dart finish and two 11-darters as well as ten 180s in a brilliant display which included one set that lasted only four minutes and 13 seconds and used 36 darts!
"I've been struggling so it's nice to wake up and it came good tonight," said Anderson, who averaged 100.65 in the display. "Colin's the type of player I like to play against, and it produced some good darts."
Anderson now meets 2010 runner-up Simon Whitlock in the last eight on Friday night, after the Australian held off Michael van Gerwen's superb fightback.
Whitlock, continuing to play through the pain of his recovering broken ankle, took ten of the game's first 11 legs to open up a three-set lead before van Gerwen overcame his early double trouble to hit back.
The 22-year-old Dutchman won the next three sets to level, but crucially missed two darts to win the opening leg of the decider, and Whitlock pounced to take victory.
"I kept thinking to myself I had to show some bottle and I knew how much I wanted this match, and that got me through," said Whitlock.
"I'm looking forward to the tough matches. That feeling you get when you're under the pump is the best feeling in the world, when you know you have to throw good darts to win - and when you do it, it's a wonderful feeling."
In the afternoon session, world number three James Wade picked up his second successive 4-0 victory with a straight sets win over Steve Farmer which took the left-hander just 45 minutes to complete.
John Part, joined The Machine in the quarter-finals with a 4-2 defeat of in-form Kevin Painter, who took the game's first set but fell 2-1 down as the Canadian hit a 161 finish in taking command.
Painter levelled by winning the fourth, but Part crucially finished 104 to take the next before edging the sixth to take victory on double ten.
Belgium's Kim Huybrechts won through to the quarter-finals with a thrilling 4-1 defeat of number nine seed Paul Nicholson, who won the first set but took only three more legs in the match.
One of those was a 170 finish, but he was unable to stem the tide as Huybrechts - buoyed by a ten-darter - sailed into the last eight with the biggest win of his career.
The quarter-finals will kick off with Hamilton meeting impressive Belgian debutant Huybrechts in the opening clash, before three-time World Champion John Part meets number three seed James Wade.
Whitlock meets Anderson in the evening's opening game before reigning champion Adrian Lewis takes on Terry Jenkins.
Ladbrokes World Darts Championship
Thursday December 29
John Part 4-2 Kevin Painter
James Wade 4-0 Steve Farmer
Kim Huybrechts 4-1 Paul Nicholson
Simon Whitlock 4-3 Michael van Gerwen
Dave Chisnall 0-4 Andy Hamilton
Gary Anderson 4-1 Colin Lloyd
Friday December 30
Afternoon Session (2pm)
Andy Hamilton v Kim Huybrechts
John Part v James Wade
Evening Session (7.30pm)
Simon Whitlock v Gary Anderson
Adrian Lewis v Terry Jenkins