Nine spot-kicks were missed, including efforts from both goalkeepers, in a terrible finale to the Capital One Cup First Round tie.
The Iron, who were backed by a 500 strong following, looked relatively comfortable against a poor Barnsley outfit for large spells of the game but never really threatened Luke Steele in the Championship sides' goal.
The best chances fell to substitute Matt Godden who spurned two golden opportunities in extra time.
The Tykes were stifled by their League Two opponents in a drab first half, struggling to pass their way through Scunthorpe's five-man midfield. Their best effort came from David Perkins, whose deflected shot was tipped over just moments after Hawkridge released Ribeiro and his cross was almost turned home in a frenetic goalmouth scramble.
Little else happened before the break and after the restart it was the visitors who looked the more likely scorers as Matt Sparrow and Deon Burton both tested Steele from close range.
Barnsley were much brighter after Jason Scotland replaced Jacob Mellis just before the hour. Ex Iron Chris Dagnall, who looked desperate to score, volleyed over when 10 yards out before fizzing an effort inches wide from a tight angle, much to the delight of the travelling fans.
Reds defender Jean-Yves M'Voto and Scunthorpe substitute Matt Godden went close in extra-time and O'Grady was guilty of missing the game's gilt-edged opportunity for the hosts.
Penalties ensued and Terry Hawkridge set the tone of what was to follow. He blasted a right footed effort well wide of the target before ex Iron Chris Dagnall failed to convert with an equally poor effort.
Michael Collins gave the Iron the advantage when Scotland smashed wide, but Sparrow missed and Barnsley levelled.
Iwelumo and Godden scored the Iron's next two while Dawson and Perkins found the net for the hosts.
Steele saved from Andy Welsh but missed the chance to become the hero with a poor effort himself, before Slocombe stepped up and smashed over.
David Mirfin cooly slotted home another for Scunthorpe but Golborne levelled it and when Niall Canavan's tame effort was saved, Chris O'Grady fired home to put Barnsley into Round Two.