Vallily had hoped to recapture the form that saw him win gold in 2010 British Olympic boxing hopefuls Simon Vallily, Charlie Edwards and Callum Smith all suffered defeat in the Olympic test event at the Excel Center.
Heavyweight Vallily, the Commonwealth Games champion, lost 7-3 to American Joseph Williams in a tight contest.
Middleweight Smith and light-flyweight Edwards were beaten by Maxim Koptyakov and Shakhobidin Zoirov respectively.
But light-welterweight Josh Taylor and welterweight Freddie Evans advanced to the semi-finals.
While Evans can look forward to a place at the 2012 Olympics after his showing at the recent World Championships in Baku, the beaten trio face an anxious qualification process in the new year.
However Smith refused to be downcast after his loss, saying: "I am not too disappointed, I know I could beat him.
"He was quite clever, circling and then pushing in quick. I'll learn from it. I was expected to win but it just wasn't my day."
Edwards was also upbeat after a 15-11 loss, adding: "I can move on from this. It is good experience.
"I will learn from that performances, learn from my mistakes and go on from there.
"I just need to make sure I train that little bit harder because I will always come back for more.
"It is not an Olympic qualifier [so that is a positive]. That is in March so I will need to make sure I go and do it there."
Vallily will also be aiming to secure his spot at the second qualifying event after a defeat that followed on from an exit at the last 16 stage in Azerbaijan.
Evans, though, was imperious in beating Uzbekistan's Jaloliddin Uktamov, saying afterwards: "It was good to get back out there after the World Championships.
"After the first round I knew he was going to come at me so I had to deal with a rush for a minute or so."
Evans and Taylor - a Commonwealth silver medallist in Delhi and victor over American Jamel Herring at the Excel - face China's Qiong Maimaitituersun and Jeff Horn of Australia on Friday.