Town dropped out of the play-off zone after drawing 1-1 at home to Sheffield United. James Beattie put the Blades in front in the first half, but Alan Lee hit back after the break, however, overall it was a lacklustre performance from the Blues.
Jim Magilton made one change of personnel from the side which drew 1-1 at Southampton on Saturday, Danny Haynes coming into the side on the left of midfield, Jon Walters moving to the right and David Norris replacing Tommy Miller in the centre alongside Velice Sumulikoski.
Town, and Haynes in particular started strongly, the England U19 international bursting away down the left, leaving Derek Geary for dead and whipping in a low cross which skidded off the surface away from Jon Walters at the far post with the Blues unusually attacking the North Stand in the first half.
On five a Couñago backheel sent Norris away but the midfielder's shot was too close to Paddy Kenny in the Sheffield United goal.
Two minutes later, Norris was felled by Gary Speed 20 yards out and Sumulikoski curled the ball around the wall but Kenny got across his goal to save.
Danny Haynes felt he might have had a penalty on eight when he appeared to be pushed as Jon Walters sent in a cross from the right, then Richard Naylor's header from a corner was scrambled away but looked to be going wide.
James Beattie picked up the game's first yellow card on 18 after complaining too vehemently to referee Kevin Friend that he'd been fouled.
The first 20 minutes had been all Town, although Kenny was yet to be forced into a serious save.
Beattie almost put the Blades in front with their first chance of the game, the former Everton striker flicking a near post header just wide.
But the game was still mainly being played at the visitors' end of the field and on 26 Sumulikoski's shot was blocked after Naylor had laid a Norris corner back to him. Soon after, Norris shot over from 25 yards.
Naylor headed another corner straight at Kenny in the 29th minute, shortly after the North Stand had serenaded the keeper with a chant of "We saw you scored on the telly”, in reference to his unfortunate own goal during last week's cup tie with Middlesbrough, the Irishman appearing amused.
The Blades went ahead within a minute. Michael Tonge was allowed to cross from the right and Beattie was left unmarked at the far post to head the ball down and into the net.
Town weren't far from hitting back two minutes later after Couñago managed to squeeze the ball along the byline to the edge of the six-yard box. The Spaniard laid it back to Lee, whose shot was blocked, then Haynes's subsequent effort also caught a defender, Lee claiming a handball. Referee Friend wasn't interested.
Town's performance drifted from there with too many passes going astray in the final 15 minutes of the half. At the whistle there were boos as the players made their way to the tunnel.
The Blues had controlled the game for most of the first half hour, but without really threatening Sheffield United's defence unduly. The goal was a poor one to concede and after the Blades went ahead Town looked nervous and lacking belief, something which has rarely been the case at home this season.
Sheffield United started the second half brightly with David Cotterill having a header blocked in the first minute.
Six minutes later, a freekick was cleared out to Michael Tonge, who struck a fierce drive which hit the top of the bar and flew over.
Almost immediately, Town hit the woodwork at the other end. David Wright floated a freekick from halfway on to Jason De Vos's head and Kenny palmed the ball on to the post.
Town got back on terms on 53. Walters was fouled wide on the right but referee Kevin Friend waved play on. Town's top scorer sent in a cross and Lee beat Kenny with a close-range header for his 11th goal of the season.
Tonge shot wide from 25 yards, then Danny Haynes hit the stanchion with a low drive after a freekick was laid off to him 35 yards out.
Haynes went wide again on the hour, prior to a Norris shot deflecting through to Kenny.
On 68 Garvan and Quinn replaced Sumulikoski and Haynes. The Macedonian had had a quiet game, but Haynes's withdrawal came as a surprise, not least to the player himself. Quinn, who joined the Blues from the Blades in January, was applauded on to the field by the few United fans who had made the journey.
Bywater saved from Tonge, then the same player hit a freekick straight at the Town keeper.
On 78 Gary Naysmith picked up a yellow card for catching Jon Walters with a flailing arm, before Couñago sent a ball across the face of goal but beyond his team-mates.
With six minutes remaining, Blades sub Rob Hulse felt he was fouled inside the area as he looped a header to Bywater, but referee Friend thought otherwise.
Town had been well below par throughout the second half and the expected push for a winner after Lee's equaliser hadn't materialised. The nearest thing to a winning goal in the closing minutes was a Dan Harding cross from the left which flew narrowly beyond Lee at the far post.
As the match moved into injury time, James Beattie claimed an unlikely penalty, while Town threatened little from a series of corners and freekicks.
A disappointing display from the Blues, who appear to have drifted out of form just as we're getting to the business end of the season. Town started strongly but after Sheffield United scored, appeared as directionless as they had at Southampton on Saturday.
The Blades weren't particularly threatening, but made it hard for the Blues to play their natural game and all too often possession was surrendered tamely with too many high balls played towards Lee, Walters and Couñago.
The need for a more predatory striker in the mould of David Nugent was evident in the first half hour, while very little of note was created during the last hour of the game.
Town drop to seventh after Plymouth's defeat of Colchester with the Blues now equal on points with Hull City. Jim Magilton's men are likely to drop further behind the pack as their weekend fixture with Cardiff is off due to the Bluebirds' FA Cup commitments.
Town: Bywater, Wright, Harding, De Vos, Naylor, Norris, Sumulikoski (Garvan 68), Walters, Haynes (Quinn 68), Lee, Couñago. Unused: Colgan, Bruce, Miller. Att: 20,190.