Michal Kadlec fired home from the spot after referee Kevin Blom had ruled that Danny Wilson had tripped Jan Rezek in the box, although there appeared to be no contact.
Even then there was still time for more controversy as in the third minute of added time, Christophe Berra went down in the other penalty area but the Dutch official ruled he had dived and duly booked thee defender.
The Hampden crowd were incensed and the fans' chances of making the trip to Poland and Ukraine next summer now appear to be slim.
The Scots trail the second-placed Czechs by five points in Group I, although they do have a game in hand.
Things had been going to plan for the Scots in what was really a must-win game.
Kenny Miller put them ahead on the stroke of half time, driving past debutant goalkeeper Jan Lastuvka after being played in by Darren Fletcher.
The Czechs fought back after the interval and it was no surprise to see Jaroslav Plasil level the match in the 78th minute.
The way the goal came was somewhat fortunate though - he nudged the ball over the line with his midriff after Rezek had crossed from the right.
It took the Scots only four minutes to restore their lead though, Miller winning the ball on the left and repaying the favour to Fletcher by squaring it across goal, allowing his skipper to find the corner of the net.
Then came the late drama.
The Scots host Lithuania on Tuesday knowing victory will mathematically keep them in the hunt, but it's now going to be hard for them to overhaul the Czechs.
Next month the Scots travel to Liechtenstein and Spain, while the Czech Repulbic entertain Spain before ending away to Luthuania.