The 43-year-old from Tranent lost 4-9, 7-5, 2-1 to wild card and former top-16 player Les Gillett of Leicester.
Marshall said: “Les played the more consistent bowls and, to be honest, I was a bit of a mixed bag in the second.”
Four Scots remain in the second round with former champions David Gourlay and Darren Burnett both in action today. Eighth seed Gourlay faces Anglo Scot Andy Thomson, seeded 10, while Burnett plays English qualifier Rob Paxton, a losing semi-finalist last year.
Tomorrow, Paul Foster will face Billy Jackson with Stewart Anderson playing defending champion Mervyn King.