Special Tiara made most of the running to win the Betway Queen Mother Champion Chase while Douvan was an odds-on flop and was subsequently reported to have finished lame.
The 11/1 shot, ridden by Noel Fehily and trained by Henry de Bromhead, jumped like a stag in the main but had to cling on in the closing stages as Fox Norton (7/1) came with a late run.
Sir Valentino filled the frame at 33/1 but the shock of the Festival so far was the awful run of Douvan, who jumped appallingly and was well beaten.
The 2/9 favourite made mistakes at three of the first four fences and was allowed to cruise home by Ruby Walsh after he was passed by a number of rivals on the run to two fences out.
Douvan's surprise reverse means Willie Mullins continues to wait for a 2017 Festival winner, while Fehily added the Champion Chase to his Champion Hurdle win aboard Buveur D'Air on Tuesday.
Fehily said: "Unbelievable. He's such a great ride, he's everything a two-mile chaser should be. He's a very good horse.
"I didn't so (beat Douvan), but I thought I had a great chance of being second. I got over the last and was surprised something hadn't come to me, but I knew he wasn't stopping.
"He has one way of running and that's flat to the mat and jump - I just let him get on with it. I've always loved two-mile chasers, the Champion Chase is the one you want to win. To win it is fantastic."
De Bromhead said: "It's an amazing day, I'm just so pleased for everyone involved.
"He seemed in great form coming into it, but it was hard to believe (could win) with Douvan and everything else - Douvan had looked so good.
"For our lad, he just tries his heart out and no-one deserves it more. I thought he jumped the slickest he's ever jumped. Often he jumps a bit high. Incredible. Any day you win a Grade One at Cheltenham is just an amazing day."
Mullins believes there will be extenuating factors behind Douvan's meek performance in seventh place.
The trainer said: "He was clearly never going and I thought at the top of the hill he'd do very well to win.
"I'm assuming something happened when he put in those huge jumps, which I've never seen him do before. I imagine I'll find a physical problem with him.
"Ruby (Walsh) said he didn't jump like he normally does and when I saw him jump the first couple of fences, I knew he couldn't get away with it in a Champion Chase. I'd been hoping he's my best ever and it's my job to try and get him back if I can.
"Ruby said he didn't feel like he was moving well behind and I imagine we'll find a problem."
Mullins was subsequently proved correct when the British Horseracing Authority vets confirmed that Douvan had finished lame behind.