Referee Riley showed the skipper the red card in the 53rd minute as players jostled waiting for Christian Ziege's corner.
It appeared nothing out of the ordinary in the box but Riley pulled Sheringham and Ipswich's John McGreal aside. He showed McGreal yellow before brandishing a straight red to Sheringham, much to the astonishment of both sets of players and fans.
If anything, the sending off took our game to another level and the 10 men toi generally camped in Town's half for the rest of the half.
But it all came to nothing and, typically in this type of game, the visitors snatched the spoils when Alun Armstrong headed in three minutes from time.
There were changes to the team that clinically desposed of Fulham seven days earlier.
Sergei Rebrov came in for Les Ferdinand, not fully recovered from minor surgery on Monday but fit enough to take his place on the bench. Christian Ziege returned after a foot injury, Mauricio Taricco switched to right wing-back and Simon Davies moved into central midfield in place of the benched Gus Poyet.
Ipswich certainly deserved parity at the break. They passed crisply and enjoyed spells of possession without really creating clear-cut chances while we struggled to get any fluency in our passing.
Nevertheless, we still looked dangerous going forward and it came as no surprise when Davies made it four goals in his last six starts with just 10 minutes on the clock.
It came on the break as Teddy Sheringham picked up the loose ball and fed Davies, he played it wide to Rebrov who twisted and turned his way into the area before whipping in a low cross that Davies prodded home fron close range.
Steffen Freund then crashed in a volley that Matteo Sereni saved comfortably but at the other end, McGreal gave an indication of the dangers to come from set-pieces when he headed Venus' corner wide.
Rebrov pounced on a Richards flick after 26 minutes but his low shot lacked power and was gathered by Sereni.
Sullivan scrambled to fingertip a Reuser curler wide but the equaliser was just around the corner.
The danger started from a free-kick on the left that Reuser delivered low, Perry cleared under pressure and Magilton's 20-yard effort was deflected narrowly wide.
From Reuser's corner McGreal powered in another header straight at Finidi George but the former Ajax star controlled on his chest before hooking over his head and home.
We almost responded straight away when Ziege's 22-yarder cannoned off the foot of the post but 1-1 was a fair reflection of the first half.
Anthony Gardner replaced Chris Perry at half-time and we came out with more urgency in our play.
Ziege somehow hit the bar from three yards after Rebrov turned Venus inside out and Sereni saved superbly from Gardner after Davies' deft touch opened up the defence following a scramble from a free-kick.
But the game changed from the resulting corner - and not because of a goal.
As Ziege prepared to take the kick, referee Mike Riley blew his whistle and dragged Sheringham and McGreal out of the area. He must have seen something no-one else had because after showing McGreal a yellow card, Sheringham was showed a straight red.
If anything, that decision added another yard to our play as the 10 men poured forward in search of the lead. The best chance of that spell came just after the hour when quick-footed Ledley King played a one-two with Taricco and his cross was drived straight at Sereni by Rebrov.
That was the Ukrainian's last action as Ferdinand entered the fray after 67 minutes. He almost made an immediate impact with a rasping volley that Sereni spilled and his attempt to find unmarked Davies from the rebound was cut out.
Still we pushed. With 74 minutes gone a quick, long throw from Ziege released Ferdinand, his cross eventually found its way to Taricco whose shot was deflected agonisingly wide by McGreal's heel.
King's header floated just wide and Naylor headed straight at Sullivan but then the decisive blow. Only three minutes remained when George picked up the ball on the right flank and whipped in a delicious ball that Armstrong beat Sullivan to to head home.
There was still time for Richards to fail to connect to a corner from close range and Sereni to save from Poyet but it wasn't to be.
Mike Riley's shock sending off of Teddy Sheringham completed turned this game on its head as the visitors' smash and grab raid left players, management and fans despondent.