Third-seeded Lorenzi won the opening set and led 4-2 in the second before going down 6-7 (5), 6-4, 6-1 against Joao Sousa of Portugal.
Last year at the clay-court event in the Austrian Alps, the Italian became the oldest first-time winner of an ATP event at 34 years, seven months.
Sousa will next play last year's semifinalist Gerald Melzer of Austria, who beat Colombian qualifier Santiago Giraldo 6-3, 7-6 (1).
Earlier, Cuevas was upset by Austria's 157th-ranked Sebastian Ofner 6-3, 2-6, 7-6 (3). It was the fourth straight defeat for the 27th-ranked Uruguayan, who had a bye in the opening round.
The 21-year-old Ofner, a wild card entrant who replaced the injured Jurgen Melzer, converted his third match point in the tiebreaker. In his first career quarterfinal he will play Renzo Olivo, who beat fellow Argentine Horacio Zeballos 7-6 (4), 6-2.
The tournament's No. 2, Fabio Fognini, became the only seeded player to reach the quarterfinals by defeating Miljan Zekic of Serbia 6-4, 6-4. The Italian will face Thomaz Bellucci of Brazil, who advanced following a 6-4, 7-6 (3) win over Jan-Lennard Struff of Germany.
Former champion Philipp Kohlschreiber reached his sixth quarterfinal of the season by defeating Jiri Vesely of the Czech Republic 6-3, 6-3. The German will take on last year's semifinalist Dusan Lajovic of Serbia, who beat fourth-seeded Gilles Simon of France 6-4, 6-4.