The Panthers looked ready to shake off their recent patchy form as PNG recruit Brian To'o bagged a hat-trick of tries en route to a 22-0 lead on Thursday.
But Penrith's premiership-winning best remains elusive, with the visitors sputtering as they lost Liam Martin (professional foul), Lindsay Smith (repeated infringements) and Jack Cogger (high tackle) for 10 minutes each from late in the first half.
It marked the first time since 1996 the Panthers had three players sin-binned in the same game, after Melbourne also lost Oryn Keeley for repeated infringements.
Panthers coach Ivan Cleary felt the match officials were "really harsh" in sin-binning Martin for obstructing Sua Fa'alogo on a kick chase.
"A professional foul is actually a deliberate act. That wasn't, obviously," he said.
The ill-disciplined Panthers were forced to play with 11 men for around three minutes and the Storm found success targeting right centre Izack Tago.
Melbourne came within eight points thanks to Siulagi Tuimalatu-Brown's skilful put-down in the right hand corner with 20 minutes to play.
But things were harder once Penrith were restored to the full complement, with the Panthers weathering an onslaught of Melbourne attack to hold on in wet conditions.
"It was pretty much just trying to keep our head above water, really, and fortunately the boys were good enough to get it done," Cleary said.
The loss officially consigns the 11th-placed Storm to their first year without finals since 2010, though they had already been relying on a mathematical miracle to qualify.
Coach Craig Bellamy rued Melbourne's slow start on Thursday night.
"We done a great job in the second half," he said.
"But why couldn't we do that at the start of the game, in the first 20 minutes?
"We didn't do that, and that's why we got the result we got."
The Panthers moved atop the ladder but are unlikely to stay there given the second-placed Sydney Roosters face bumbling Wests Tigers this weekend.
The win came in Cleary's 500th game as an NRL coach, but it was another Jekyll-and-Hyde showing from the master mentor's side.
Things started well as Martin batted down a Nathan Cleary kick, with Smith gathering the ball and sending a beautiful cutout pass over to To'o.
To'o picked off a wayward ball from Fa'alogo and dashed 60 metres for his second try, before a bullet-like Cleary pass gave him his third.
To'o now has 102 career tries, putting him outright second on the club leaderboard behind only 2003 premiership winner Rhys Wesser (113).
"He's been an absolute stalwart of our team, a cornerstone of everything we've ever done," coach Cleary said of the four-time premiership winner.
The sin-binnings meant things never hit the same heights again for the Panthers, who could lose five-eighth Cogger to suspension for his high shot on Tyran Wishart.
Replacing Blaize Talagi with the more defensively assured Cogger has been an inspired choice from coach Cleary.
But Cogger has already been suspended once this season for rushing out of the line to make a high tackle and is set to come under scrutiny again as finals approach.
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