After Shaun Bloom had missed his spot-kick, 16-year-old Harry Ward had the chance to fire Sherburn into the final into the penalty shoot-out at 4-3 ahead, but blazed his shot over the top, Rovers brought it back to 4-4 through sub Josh Welburn and then Matty Whitehall also hammered his effort over the bar.
This left sub Ellis Wilson with the chance to secure a spot in the final for the Division Two leaders, and he fired his effort past Tom Cammish to inflict a heart-breaking defeat upon the villagers.
The visitors took the lead after 20 minutes, Whitehall scoring from close-range after Kristian Wilkinson had headed across goal from a corner-kick.
Rovers piled on the pressure looking for the leveller but Sherburn held firm, until the 70th minute when player-manager Mikey Barker led by example to race through and shoot past Cammish.
Eight minutes from time a wonder-goal from Liam Buglass looked to have earned the win for Itis Itis, the former Newlands man smashing home an unstoppable 23-yard volley into the top corner.
In injury-time, Sam Pickard gave away a foul on the halfway line, Sherburn keeper Cammish took the free-kick as Sherburn threw everyone forward looking for a leveller, the free-kick sailed past everyone in the area and into the net to spark celebrations among Andy Adamson's troops.
The sides chose to go straight to a penalty shoot-out and despite Sherburn making the early running, Barker's side kept their cool to move into the final.
Neil Forsyth, who started at centre-back and moved to left-back, was the Rovers man of the match, while teenager Joey Harris was again the star man for Sherburn in midfield.
Itis Itis Rovers returned to action less than 24 hours later at Ayton, but their title bid was dented as they suffered their first league loss of their season, the village side winning 3-2.
Tyler Beck put the home side in front, taking the ball past two Rovers defenders before slotting home, but player-boss Mikey Barker levelled before the break.
Ten minutes after half-time Ayton player-manager Sean Pinder converted a penalty to put the home side in front after Joe Bradshaw had been fouled.
Barker equalised again but Ayton secured the points when Beck scored after another fine run and neat finish.
The Ayton team shared the man of the match award while striker Curtis Rose was star man for a depleted Rovers.
Scalby took full advantage of this slip as they won 5-3 against Cayton at the Flamingo Land Stadium.
Cayton took the lead in the first minute through Tom Sixsmith after a fine through-ball from Josh Venner but man of the match Rob Speight equalised on 10 minutes from the penalty spot and made it 2-1 five minutes later.
A second Cayton goal 10 minutes into the second half through Isaac Sands brought it all-square, but 15 minutes from time Mark Oldroyd put Scalby back in front against the run of play.
Five minutes later Cayton made it 3-3 through Sixsmith, only for Ashley Townley to restore Scalby's lead in the 85th minute with a great header, Taylor Jordan adding a fifth in the final minute.
Centre-backs Luke Foster and Jake McAleese were the men of the match for Cayton.
FC Rosette earned a 1-0 home win against Snainton thanks to a first-half own goal.
The man of the match for the Newby-based side was central midfielder George Loy, while Shane McAauley was star man for Snainton, who were left to regret several missed chances.
Commercial earned a 2-1 home win against Fishburn Park Reserves.
The home side went ahead early on when Luke Priestley tapped home from close-range after a shot from Michael Hernandez landed at his feet.
Midway through the second half Commercial man of the match Hernandez smashed home a superb 20-yard match to double their lead.
Paul Jobling's long-range lob came too late to save Park, whose man of the match was centre-back Andrew Kelly.
Goldsborough powered to an 11-1 home win against Old Vic.
Ben Watson led the way with four goals, Tommy Jobling also notching a hat-trick.
Efforts from Jonathan Morrison, Dave Carmody, MIke Dent and an own goal completed the rout.