Rio de Janeiro, Brazil: Crisis-struck Argentine football suffered another blow Wednesday when the two-time Olympic gold medallists were dumped out of the Rio Games at the group stages following a 1-1 draw with Honduras.

Argentina needed to win to secure a place in the last eight due to their inferior goal difference with the Hondurans after both had lost to Portugal and beat Algeria in their opening two group matches.

However, the Central Americans sprung a huge surprise as Antony Lorenzo's penalty 15 minutes from time put them in front in Brasilia and, despite Mauricio Martinez's equaliser deep into stoppage time, Argentina bowed out in embarrassing fashion.

The Albiceleste's chances were severely hampered by chaotic preparation for the Games.

Coach Julio Olarticoechea, who had been coaching the Argentine women's team, was put in charge just weeks before the tournament began after Gerardo Martino resigned citing power squabbles at the Argentine Football Association (AFA) and clubs not releasing players for the Olympics.

Hosts Brazil hope to avoid the same fate as their eternal rivals later on Wednesday when they take on Denmark in Salvador needing to win to guarantee their place in the last eight.

Portugal secured top spot in Group D with a 1-1 draw against Algeria in Belo Horizonte.

Martino's resignation also came after losing a second Copa America final to Chile in as many years in June which provoked a tearful Lionel Messi to announce his retirement from international football.

New coach of the Argentina senior team Edgardo Bauza arrived in Barcelona on Tuesday on a mission to convince five-time World Player of the Year Messi to reverse his decision.

The day after AFA announced the 18-man squad for the Olympics last month three players, Atletico Madrid’s Luciano Vietto, Independiente’s Víctor Cuesta and Velez Sarsfield’s Lautaro Gianetti, dropped out.

In contrast to the World Cup and major regional tournaments, clubs are not obliged by FIFA to release players for the tournament in which squads are comprised of players under the age of 23 with each country allowed a maximum of three overage players.

- 'Mafia' –

After Martino's coaching staff also resigned, Olarticoechea was the only coach still contracted to AFA.

The country's president Mauricio Macri has slammed corruption and bad management at the federation, which is paralysed by a squabble over broadcasting rights.

‘We cannot carry on with a system full of bad habits and corruption,’ said Macri, himself a former football executive.

Major clubs such as River Plate and Boca Juniors want to break away and form a ‘superleague’ to ensure bigger broadcasting revenues.

Smaller clubs fear they will get squeezed out by their bigger competitors.

The courts last month started auditing AFA's accounts to determine how it used its state funding over recent years.

Legendary former player Diego Maradona branded AFA's management a ‘mafia,’ pointing the finger at its late president Julio Grondona.

‘We still have the same Grondona mafia,’ said the 1986 World Cup winner last month.

‘I want an audit. I want a clean and transparent AFA.’