The Blues thought they had won it when Ben Blair kicked a 70th minute penalty after captain Xavier Rush's try had given them a half-time lead only to crash to their second defeat of the New Year.
A losing bonus point took them level overnight with leaders Leinster, who face the Ospreys 24 hours later in Dublin, but Coach Dai Young will be concerned at the loss of form so close to the resumption of the Heineken Cup.
Last night's clash was the first taste of Welsh rugby for new Elite Performance Director Graeme Maw following his appointment on Thursday, though the conditions seriously hampered the opportunity for players to impress.
While the Blues were firing for top spot in the table, Edinburgh's similar form had the Scottish outfit eyeing honours as well and they took the lead at the Arms Park inside eight minutes.
Simon Webster raced onto Jason Spice's aimless clearance and Phil Godman made the overlap count, drawing the final defender before delivering the scoring pass to wing Andrew Turnbull.
The Blues recovered to dominate the rest of the half and for the second time in ten days at the Arms Park, the visitors were reduced to 13 men as pressure told.
The Dragons found themselves in a similar situation on Boxing Day, now it was Edinburgh forced onto the wrong side of the law after centre Nick De Luca on the half-hour mark, and then lock Matt Mustchin four minutes later were shown yellow cards for professional fouls.
The Blues pack made their advantage count, shoving the Edinburgh scrum off their own put-in in front of goal. Rush wasted no time and the giant former All Black picked up and steam-rollered over from ten yards out. Blair's conversion was enough to hand the Blues a 7-5 lead that they took into half-time.
The second-half arm-wrestle in the mud brought the game to a virtual stand still with few try-scoring opportunities for either team.
Godman put Edinburgh ahead with a penalty on 56 minutes after the Scots squeezed the Blues when finally back to full strength.
The arrival of Paul Tito galvanised the home side who regained a 10-8 lead through Blair on 70 minutes only for Godman to strike minutes from the final whistle.