The eastern Europeans, a tier-three nation ranked 17 in the world, were denied two minutes from time by some last-gasp defending from Denis Leamy.
It was another abysmal evening from Ireland, following hot on the heels of Sunday's demoralising 32-17 triumph over Namibia.
Brian O'Driscoll's side were widely tipped to make an impact at the World Cup but instead have seen their reputation tarnished by successive horror-shows.
And it was not only their egos that were left battered and bruised tonight. The failure to secure a bonus point could prove telling in Pool D's final reckoning.
With France and Argentina to come, Ireland's hopes of reaching the quarter-finals appear more remote than ever but O'Sullivan is refusing to raise the white flag just yet.
"I'm not dismayed but I'm disappointed by the performance. I'm worried about why we aren't clicking," he said.
"We've had two tough games and we've benefited from them but we know we'll have to turn it up a notch against France.
"We know what France will bring to the party. The big ask is if we can improve enough to beat France. I'm an optimist so I think we can.
"Not getting the bonus point is a setback but sometimes you have to forget about not getting the bonus point when the result itself is at stake.
"It was a bruiser but the harder the games we have, the better. Getting a good pounding will stand us in good stead for what's to come.
"If we were a weaker team mentally then we would probably have thrown in the towel during the second half.
"What the performance does show is that we are willing to dig in and work for what we get.
"Irish rugby rarely gets anything for free and we had to fight for everything tonight."
A pushover try from Rory Best, converted by Ronan O'Gara, helped Ireland to a 7-3 half-time lead.
But the stadium was brought to its feet four minutes after the interval when the impressive Giorgi Shkinin pounced on a loose Peter Stringer pass to grab an interception try.
Fly-half Merab Kvirikashvili slotted the conversion to accompany his earlier penalty to hand Georgia an astonishing 10-7 advantage.
Ireland rallied and showed a rare clinical touch when Girvan Dempsey finished a swashbuckling Gordon D'Arcy break, setting up a grandstand finish.
The Georgians poured forward in search of the match-winning try they deserved but were denied by Irish resilience.
It was a dramatic end to a gripping contest and Georgia captain Ilia Zedginidze's only regret was his side failed to snatch victory.
"The game was very hard but our confidence had grown after the Argentina game," he said.
"We proved that we can play against teams higher in the rankings.
"We did great things this evening. We went close and I'm very happy with the performance.
"When you look at the stats, we had 70 per cent of possession. Everyone has had their regret we didn't score a try or more points.
"Ireland's defence was very good but we wanted to win the game."
Zedginidze generously offered some comfort to Ireland, who saw any lingering pretensions of making an impact in France ripped to shreds.
"Maybe Ireland didn't play their best game against us," he said.
"It's sometimes hard for the bigger teams to prepare properly matches against sides like Georgia and Namibia.
"I think in their last two games against France and Argentina, Ireland will show the team they really are."