Apart from Vishnu, other seeded players in N Sriram Balaji, Saket Myneni and Vijayant Malik also bowed out of the tournament after losing their respective matches.
However, sixth seeded Jeevan Nedunchezhiyan, who recently lifted the men's title in the senior nationals, made it to the quarterfinals with a hard-fought victory.
Vishnu, who survived a gruelling three-setter against another Secunderabad rival Ashwin Vijayraghavan in round one yesterday, dropped the opening set against Croatia's Mate Pavic 5-7 before he conceded the match. Pavic would take on Indian eighth seeded Ranjeet Virali-Murugesan.
"I was having stiffness in the knee," Vishnu, who is currently ranked 272, said after the match.
Vishnu has also pulled out of next week's Futures in Pune and "will take a call" later on next month's Challenger event in Yokohama, Japan.
Also making an exit was third seeded Sriram, who was beaten after a two-and-a-half hour battle against Britain's James Marsalek, a quarter-finalist at last week's Qatar Futures in Doha.
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The 20-year-old Marsalek, who practised for five days against US Open champion and London Olympic gold medallist Andy Murray before reaching Qatar, won 4-6 6-2 6-4.
Marsalek, ranked 570 in the world after being 681st last year-end, would meet India's Purav Raja, who shocked seventh seeded Malik 7-5 4-6 6-4 in two hours and 18 minutes.
The other seeded Indian casualty, Myneni, lost to Micolas Reissig of Austria 6-2 4-6 5-7.
Jeevan registered a 4-6 6-3 6-2 win over compatriot Mohit Mayur Jayaprakash. (More)