Louisville, which shot just 33.3% from the field in the first half, didn't put it's first points on the scoreboard until 6:10 had ticked away.
Following a David Padgett dunk that narrowed Dayton's lead to 10-4 with 13 minutes remaining in the first half, Dayton ran off six straight points to build it's largest lead of the game.
A Terrance Williams dunk pulled the Cardinals back within six at 20-14, but a string of missed layups kept Pitino's team from inching any further before the break.
"I've been coaching for a long time and I don't think I've ever lost a game where you can really attribute it to missed lay-ups," said Pitino following the loss. "I think we missed five or six uncontested lay-ups in the game and I don't think that's ever happened to me as a coach. Going down the stretch, they were uncontested going in and we missed them. I've never seen that before and it was that kind of night offensively."
Following a quick timeout shortly after the start of the second half, the Cardinals started to look like a team that could pull off a come-from-behind victory.
Juan Palacios, who recorded a double-double with 13 points and 11 rebounds, scored four points during the first four minutes of the second frame to help the Cardinals narrow Dayton's lead to 36-33.
Dayton guard Brian Roberts entered the game averaging 23.8 points per game and his play on Friday night help thwart any chance of a Cardinal comeback.
"Brian Roberts off the ball really hurt us," said Pitino of the junior's 20 point performance. "It was an excellent game and they obviously made the big shots down the end and we couldn't."
However, U of L gave it a great try. After falling behind by eight with 13:33 to play, the Cardinals went on a 20-7 run and grabbed a 53-48 lead with 5:59 remaining.
Dayton answered with a 20-9 run to close the game and claim a 68-64 victory.
Louisville's next outing will be December 2 when it hosts Sacramento State at Freedom Hall.