"The Whites' dream is in danger," sports daily Marca wrote on Wednesday, after a spectacular strike from Jean Makoun gave Lyon a deserved victory in the first leg on Tuesday.
"Madrid return from Lyon showing no sign of being a contender for the title," said AS.
Real's big guns of Cristiano Ronaldo, Kaka and late substitute Karim Benzema failed to rise to the occasion and Spanish media criticised coach Manuel Pellegrini's decision to play little-used Malian Mahamadou Diarra as a second holding midfielder, singling out Kaka as one of the most disappointing figures on the night.
"Kaka is still lost," said El Pais. "The Brazilian star missed the chance to prove his relevance to Madrid."
A one-goal deficit is far from the end for a club with such a talented squad, and players and club officials were united in their belief they could turn round the tie on March 10.
However, after five consecutive seasons of exiting the competition in the first knockout round, Real's director general Jorge Valdano was clearly worried.
"It was a bad night. We had ups and downs in our play and we weren't ourselves," the Argentine told Spanish state television. "We left a bad impression of our team.
"In the return at the Bernabeu we will have to have maximum concentration and will not be able to make a single mistake."
Pellegrini will be without the suspended Marcelo and Xabi Alonso for the second leg.
