Palace were backed by 3,000 fans in Lyon, but, despite an improved performance in the second half, left empty handed.
They nearly snatched a draw in the 90th minute but Chris Richards' header following Wharton's corner was well saved by home goalkeeper Dominik Greif.
This match was one of the standout ties for the Eagles supporters when the draw was made.
After the club won the FA Cup for the first time in 2025, that achievement should have earned Palace a place in the 2025-26 Europa League.
However, the Eagles were demoted to the third-tier Conference League because then co-owner John Textor was also the majority owner of Lyon.
The American sold his share in Palace and left his leadership role with Lyon that summer. But European football's governing body Uefa said Lyon, as they had finished higher in their domestic league, would stay in the Europa League, with Palace dropping down.
Palace then won the Conference League to earn their spot back in the Europa League for 2026-27.
Sage's side were left rueing a slow start as they offered little as an attacking force in the opening half, with the hosts looking comfortable at 2-0.
Palace were the better side after the break and following their goal had chances to earn a point, but Jorgen Strand Larsen headed over and substitute Kamada had a shot saved.
Lyon's third goal then came against the run of play and although Kamada scored soon after, it was not enough.
The Eagles play at rivals Brighton on Sunday before returning to Europa League action when they travel to Turkey to face Besiktas next Thursday.