The Royals crashed to a 2-1 defeat to fellow strugglers Aston Villa that leaves them above bottom-placed QPR on goals scored only.
McDermott's men had begun the day able to climb out of the bottom three with a win and had led thanks to a calamitous Nathan Baker own goal on the half-hour.
But they failed to cash in on their luck as Christian Benteke levelled two minutes later before Gabby Agbonlahor profited on hesitant defending to thump in the winner in first-half injury time.
The full-time whistle was greeted by boos for the second successive home match - after the Royals fans also missed the chance to escape the bottom three in a 3-0 reverse against Wigan a fortnight ago - and with trips to Manchester United and Arsenal next up, McDermott admitted his side had suffered a major blow.
"We're hurting. We are very much hurting at this moment in time," he said. "It was disappointing to say the least. It was rough.
"When we got 1-0 up I though we were ready to kick on. We didn't do that and that's cost us.
"We were disappointed with both goals. We've got ourselves into the lead and they've scored virtually straight after. We have to hold our hands up. We need to be better and see the game out. I know that and the players know that."
A fourth league defeat on the spin was made worse by QPR's 3-1 win over Sunderland to leave the Royals looking as the most vulnerable of the bottom clubs. Trips to Old Trafford and Emirates Stadium before the end of the month could start to leave Reading adrift with just nine games left.
"They're not friendly (fixtures). They are big, big clubs in Manchester United and Arsenal," McDermott said. "We'll see where we are at the end of March and then go from there."