Murray went down to the world number one, Rafael Nadal, in four sets, despite a very strong first set as the Scot played some of his best tennis.
But Nadal, who now has 20 unbeaten Wimbledon matches under his belt, outclassed Murray and is now preparing for his 13th Grand Slam final tomorrow.
Britain's hopes now lie with Liam Broady who reached the boys' final yesterday afternoon.
Speaking after the win, Nadal said: "For me, it's a dream to be back in the final. I'm very happy. I feel sad for Murray. I think he deserves to be in this final too. I wish him all the best for the rest of the year.
"He's a great champion and the only way to beat him is to be really aggressive and play some fantastic shots.
"He was playing fantastic at the beginning, but he made a mistake at the beginning of the second set and that was one of the turning points of the match."
Tennis great Boris Becker, said of Murray's game, said: "Well, that's one more set than l ast year. Nadal has too much power, too much of everything."
Last night Murray's grandmother, Ellen, 77, insisted he remained a hero. She said: "We all love you just the same. I know your time will come."
"I'm not worried about how he'll get over this disappointment. He may have struggled a little in the past but he's a lot better now, in his mind. He'll be down just now but he'll get back up and come back stronger.
"The support he's had at Wimbledon has been wonderful. It's been nice to see that."
As punters spilled out of pubs in Dunblane, David Symon, 24, an old schoolmate of Murray's and now barman at the town's Village Inn, said: "Everyone was glued to the TV in here, willing Andy to win, but it was frustrating. Good luck to Rafael in the final."
Locals said they remain hopeful. Dunblane hotel landlord Tom McLean, 63 said: "I won't be serving strawberries and cream on Sunday - it'll just be another Sunday. But Andy will win a slam one day, and when he does we'll all be here to watch it."
In London, an enthusiastic Murray fanbase was out in force in hopes of a British win. Saltires waved as Murray called for a trainer just a few minutes into the game, adding to the nervous energy of centre court, but later waved him off.
Back and forth the first set went - for every game Murray took, Nadal caught up.
Article Source KBG Test Blog (http://rc.kbg.me)
