Now, they must beat Canada on Saturday, and hope that Australia beat India to play in the third-fourth classification.
Right after the Negaraku was sung, and even before the crowd could settle down on their seats, the Malaysian defense cracked when Lee Jung Jun scored off a third minute field attempt.
The first quarter was a tensed affair for Malaysia as Korea camped in the hosts semi-circle, and Malaysia relied on counter-attacks. Korea had two penalty corners, and the first was saved by Baljit Singh, while Baljit and goalkeeper S. Kumar made gallant saved to stop the second attempt.
Korea piled more misery when in the 29th minute Lee Nam Young's top-of-the semi-circle caught Kumar wrong footed, as his view was blocked by defender Azlan Misron, and Korea walked into the dressing room for a well-deserved half-time water break.
Malaysia need a dressing down during the break, as they played their worse game of the tournament thus far.
Strikers Faizal Saari, Tengku Ahmad Tajuddin and Firhan Ashaari played defensive, and when they went up to attack, they lost the ball easily and had to back-pedal, burning energy for no reason.
Malaysian coach Tai Beng Hai must have trashed his charges, as after the re-start, they won the first penalty corner in the 32nd minute and Faizal's powerful drive beat goalkeeper Kim Jaeh Yeon with ease.
It was match-on for Malaysia after that spectacular goal.
Cheered on by a capacity crowd, Malaysia went on the attack and won their second penalty corner and this time Razie Rahim's drive went crashing into the net for a 34th minute 2-2 equaliser.
But sloppy defending crept in again, and Kim Young Jin gave Korea the lead again off a soft field attempt one minute later.
There was plenty of effort put in by the men in yellow, but the clock ran out on them as they went looking for the equaliser.
Meanwhile, Australia qualified for the final with a game in hand when they beat New Zealand 3-1. Australia play India in the last pool match on Saturday, and it will be a warm-up before they make an attempt for a ninth Azlan Shah Cup title.
New Zealand play South Korea and still have a chance to join their neighbours in the Sunday final.
Dylan Wotherspoon (17th), Jamie Dwyer (24th) and Jeremy Hayward (28th) scored for Australia while Andy Hayward (32nd) scored the Kiwi consolation.
P W D L F A Pts
AUSTRALIA 4 4 0 0 18 5 12
N ZEALAND 4 3 0 1 12 6 9
S KOREA 4 2 1 1 10 10 7
INDIA 4 1 1 2 10 10 4
MALAYSIA 4 1 0 3 9 12 3
CANADA 4 0 0 4 4 20 0
RESULTS: India 5 Canada 3, New Zealand 1 Australia 3, Malaysia 2 South Korea 3.
April 10: REST DAY.
April 11: Australia v India (4pm), South Korea v New Zealand (6pm), Malaysia v Canada (8pm).