THE already complex situation with Rangers and their manager took a further twist last night with a defeat that has surely killed off the Ibrox club's slim hopes of winning the SPFL Championship.

A powerful first-half free-kick from Kevin Holt and an exquisite second half strike from Gavin Reilly ensured that Queen of the South recorded a richly-deserved win at Palmerston Park.

Second tier leaders Hearts take on Cowdenbeath at Central Park this afternoon and if they beat their part-time opponents they will move 12 points clear of their nearest challengers.

If Hearts do it is very difficult to see how, given how impressively they have been playing and how poorly Rangers have been performing in recent weeks, how the capital club can be caught.

The result - the third time in five competitive outings that the League One champions have been beaten - was certainly the worst possible end to what had been a wretched day for Rangers.

Exactly what this latest loss, the third in a row away from home, means for Ally McCoist and Rangers really is anybody's guess.

McCoist made one change to the starting line-up that had taken to the field in a league game against Cowdenbeath at Ibrox six days earlier.

Kris Boyd, who had passed up several scoring opportunities in that narrow 1-0 win over part-time rivals at home, dropped to the bench.

Jon Daly took his place up front. Rangers fans had expected to see Lee Wallace, who had missed the game with Cowdenbeath on compassionate grounds, back in the side after he returned to training in midweek.

Yet, the Scotland internationalist was missing from the entire 18 man squad, never mind the side, and Richard Foster remained out of position at left back in his continued absence.

With Lewis Macleod also out of action - the young midfielder is sidelined with a hamstring strain - the visitors were shorn of the services of their two most consistent outfield players.

But the team selection and formation were overshadowed by the bizarre events of the day and speculation about what will happen next in the daily soap opera that Rangers has become.

Certainly, there was only one topic of conversation in the hostelries of Dumfries and on the terraces of Palmerston in the build-up to a game that was televised live by BT Sport.

"What's the situation with Ally and Rangers?" was the question on the lips of every Gers supporter who had braved the winter weather and travelled south and, for that matter, many Queens fans as well.

McCoist wasn't spotted on the team bus as it left Murray Park in Milngavie by waiting reporters this afternoon and that had led to online speculation he would be absent from the dugout.

A crowd of interested onlookers gathered outside the entrance to the stadium a good hour before kick-off to see if he would show up and they were joined by several television camera crews and photographers.

But when the team bus eventually pulled into the car park the 52-year-old was the first man to get off it. He was applauded and greeted with cheers and a lone cry of: "C'mon Ally!"

McCoist took his place in the away dugout before kick-off to more cheers from the large contingent of travelling supporters - and a few in the main stand who were there to back the home team.

The Rangers manager could have been forgiven for wishing that he had remained at home shortly after the game kicked off. Queen of the South were very quickly in the ascendency.

John Baird powered into the Rangers penalty area in just the third minute and with Steve Simonsen cruelly exposed he should have netted.

However, he hooked his attempt wide. Then in 11 minutes Iain Russell had an excellent opportunity to put the side managed by James Fowler, an old Kilmarnock team mate of McCoist, in front when he broke clear.

But with Dean Shiels, who sprinted the entire length of the park to help out his defence, bearing down on him he panicked and shot directly at the perfectly positioned Simonsen.

Queens, though, took the lead in 21 minutes after Darren McGregor had gifted them a free-kick on the edge of his penalty box by deliberately handling a Danny Carmichael cross.

The centre-half, who was once again selected at right back, was very lucky only to be booked for his infringement by referee Andrew Dallas and to remain on the field of play.

Kevin Holt stepped up to take the set-piece and made no mistake sending a left foot shot fizzing past the defensive wall and the outstretched Simsonsen and into the roof of the net.

Rangers offered little in response. Fraser Aird picked out Bilel Mohsni with a high floated cross from the right flank in 32 minutes, but the defender headed over from a few yards out.

David Templeton came on for Shiels at half-time and Kris Boyd and Nicky Clark replaced Daly and Kenny Miller respectively early in the second half as McCoist pushed for an equaliser.

But it was Queen of the South who struck in the 66 minute to seal a memorable triumph. Reilly collected a Carmichael cross from the right wing and his shot went in off the right upright.