The three-time World Player of the Year squandered a host of good chances, leaving his country without a win and on the brink of being eliminated from Euro 2016
Austria, which was so disappointing in defeat against Hungary, started the game brightly and should have taken the lead inside three minutes.
Marcel Sabitzer curled a wonderful ball into the six-yard box, but Martin Harnik couldn't quite climb high enough to nod the ball home, watching in despair as it flicked off his forehead and floated wide.
From then on, it was all Portugal. Led by an attacking trio of Cristiano Ronaldo, Nani and Ricardo Quaresma, wave after wave of red shirts descended on the Austrian goal but were unable to make a breakthrough.
Nani drew a brilliant, diving save from Robert Almer in the Austria goal, before a short corner routine ended with the former Manchester United man crashing a header of the post.
The two best chances of the half fell to Ronaldo, a swift team move culminating in Nani squaring the ball for the Real Madrid star, but he could only guide his side-foot finish wide of the post.
Moments later, Quaresma headed his own deflected shot into Ronaldo's path but his effort was lacking enough power to trouble Almer.
The broad smile on his face gradually started to fade.
With 10 minutes remaining, Ronaldo's moment of redemption arrived. After being blatantly hauled down in the box by Martin Hinteregger, he picked himself up and planted his feet wide in that trademark stance.
He stepped up and could only watch in bemusement as he drilled his penalty off the bottom of the post.
It was just one of those nights.
Then, as if to rub salt into the wounds, the Portugal captain wheeled away in celebration after heading Nani's free kick past Almer, only to be met with the sight of the linesman's flag raised for offside.
On a night that should have been of celebration -- Ronaldo overtook Luis Figo as the most-capped Portugal player in history -- one of the great underachievers in European football is now staring Euro 2016 elimination in the face.
Everything Iceland does at Euro 2016
, on the other hand, writes a new page in the country's history books.
Just by qualifying it made history. Birkir Bjarnason's goal against Portugal made history. The point gained from the draw against Portugal made history.
However, it was denied the chance of a first international competition win by an unfortunate last-minute own goal -- an own goal that looks set to send Hungary through to the last 16.
After an impressive victory over Austria -- considered by many dark horses for this tournament -- the Hungarians could have been forgiven for thinking that overcoming Iceland, and qualifying for the last 16, was a considerably simpler task.
In an even first half, both sides' lack of quality in the final third was evident and, for all their enthusiasm, neither was able to create any clear-cut opportunities.
Eventually, it was a goalkeeping blunder and controversial refereeing decision that broke the deadlock.
Hungary's eccentric veteran goalkeeper Gabor Kiraly -- seen producing no-look throws and rolling the ball between his legs -- seemed to have a corner under control, but spilled the ball at Aron Gunnarsson's feet.
The Cardiff City midfielder took a touch around Hungary defender Tamas Kadar and went to ground, prompting referee Sergei Karasev to point to the penalty spot.
Premier League star Gylfi Sigurdsson stepped up confidently and rolled the ball into the corner, sending Kiraly the wrong way.
Iceland had 45 minutes to hold on for the win.
The islanders irked Cristiano Ronaldo in its first game, defending valiantly to hold on for a draw after scoring an equalizer early in the second half.
"Iceland only tried to defend... they had two chances and then did not try to score," the Real Madrid man said after the game.
"They celebrated like they had won the Euro cup or something, that's a small mentality. That's why they'll do nothing."
Unfortunately, Iceland wasn't able to reproduce its defensive heroics again.
With just two minutes of regulation time remaining, Birkir Saevarsson slid into the six-yard box to try and prevent Adam Szalai from scoring but inadvertently put the ball into his own net.
Iceland were heartbroken, but almost stole the win in the final seconds of stoppage time.
Sigurdsson's free kick hit the wall and fell into the path of veteran striker Eidur Gudjohnsen -- but there was to be no fairytale ending, his shot hitting Kadar's heel and spinning past the post.
With an underwhelming Austria team to play next, Iceland can be confident of writing yet more history.
Hungary plays Portugal in the group's final game, although are all-but assured of a place in the last 16.