Lindsay was disqualified after twice tangling with Canada's Jessica Gregg at the start of their 500m short track quarter-final at the Pacific Coliseum.
The 29-year old, who is competing at her third Olympics, had focused all her attention on the sprint distance and will not race again in Canada.
All the drama happened in the first 10 metres. At the first start attempt, Elise Christie and Gregg bumped and both crashed into the hoardings.
The referee ordered all four skaters back to the line and Gregg promptly false-started.
At the third time of asking Lindsay and the Canadian clashed again, with the referee taking the decision to disqualify the British skater.
Lindsay's coach, former Olympic short track bronze medallist Nicky Gooch, was incensed, rowing with the officials and labeling their call as "outrageous".
"This Olympics felt so much more important than the previous two," said Lindsay.
"I had to work so long and hard to come back from the injury, I really saw this year as another chance.
"The last few weeks I've been skating as fast as I ever have. After the injury, I never thought I would skate those times again, so I was super excited coming into this.
"I was definitely in with a chance. My starts were 100 per cent back on form and I've been skating quick.
"I'm not sure what happened, I've never seen it before. I was in a World Cup race a few years ago where the race was restarted five times.
"It's a tight space and everyone is aiming for the same spot."
Nicky Gooch - the last British skater to win an Olympic short track medal - hit out at the decision to disqualify Lindsay.
"It's very disappointing because we believed Sarah would get through," said a visibly upset Gooch, who is now the British team coach.
"We think it is unfair and it was a bad decision. On the World Cup circuit, that kind of incident, where two athletes are going for the same spot, is a normal occurrence.
"Things can get physical at the start and skaters do fall over but the race is always called back.
"The referee called the first one back and then he decided that Sarah was being too aggressive and he wanted to get on with it.
"This is Sarah's last Olympics and she was really going for it and we're devastated it's not worked out for her. It's going to be a bitter pill to swallow going out like that."
Gooch admitted nothing had gone right for Britain's short track team at the Pacific Coliseum.
In addition to Lindsay's disqualification, Christie was barged out of her 500m quarter-final in contentious circumstances while Jon Eley and Tom Iveson both failed in the heats of the men's 1000m.
But it was the failure of the men's 5000m relay team - bronze medallists at the recent European Championships in Dresden - that really hit Gooch.
An outside medal shot, they came home last in their semi-final.
"It was a big disappointment," he added. "The guys skated five seconds slower than they are capable of doing and we need to work out why that is.
"From that point of view it's a disappointment, even if the bigger picture is encouraging.
"Maybe it was a knock-on effect as to how the rest of the day has transpired with everything going wrong, starting with Sarah's disqualification.
"It takes mental toughness to battle through that and it's something to work on."