The Malaysian's final Asian Games ended in heartbreak as he pulled back from a game down against his long-time nemesis but faded in the decider.
In the final, defending champion Lin is likely to face China's world title-holder Chen Long, who takes on Hong Kong's Wei Nan in the other semi.
But Lee, 31, will be left to ponder the ruins of what was undoubtedly one of his last chances to outclass Lin on one of the sport's big stages.
The first game already had the hallmarks of a classic as both players punched back fast returns and forced each other to dive for long shots. (Disqualified Bahrain Runner Retains Gold)
Lee started stronger, going into the break 11-5 up, but Lin quickly battled back with smashes and deft net shots, suddenly turning on the power for 13-13.
Lee pulled ahead again with a three-point lead only to be brought back to 20-20 and lose it 22-20 as Lin unleashed cross-court drives which left the Malaysian sprawling.
The second saw Lee pull ahead 11-7 and this time he managed to fend off an attempted Lin comeback with delicately angled net play and a determination to get back every shot, lunging to whatever Lin threw at him to take the game 21-12.
But the Chinese superstar turned the tables in the third, romping to an 8-2 lead which Lee could not close. Both players used everything in their armoury with powerful Lin firing pistol shots that bounced of Lee's racquet.
Despite some flashes of brilliance from a scampering Lee, who flicked one lightning-fast backhand return from the net which Lin hardly saw, it was not enough and he lost the third by a yawning 12 points.
It was the latest in a string of high-profile Lin victories in badminton's best rivalry, including in the 2010 Asian Games final in Guangzhou.