Latvian international Vitalijs Astafjevs volleyed the first for Rovers on 85 minutes, and Wayne Carlisle blasted the second in the 87th after Cliff Byrne had given away a free kick 22 yards out.
United had been leading thanks to Martin Carruther's 15th goal of the season could not believe their luck.
Defeat hinders our play-off asperations, but the three points for battling Rovers boosts their hopes of avoiding relegation to the Conference.
Their new spirit was evident early on when Paul Tait led a breakout from a corner with a weighted cross field ball which put David Gilroy on a solo run deep into the heart of Scunthorpe's defence.
As his run lost momentum, Astafjevs came up on his right with a rising shot onto the bar.
Scunthorpe fought back with though, with Torps heading fractionally over from a corner.
The home defence came under increasing pressure and twice they looked to Kevin Austin in gratitude, as his experience and reading of the game got them out of trouble.
Scunthorpe were building their attacks well around playmaker Ian Kilford, but were still liable to be caught out by the enthusiasm behind Rovers' solo runs.
Paul Tait, a former Iron target, had the ball in the back of the net just before the break. The linesman's flag saved theit blushes though.
There was an even closer call in the second half when Carlisle hit the foot of the post with keeper Tom Evans badly positioned.
Scunthorpe still thought they were heading for their sixth away win when a mistake by Austin led to Carruthers 64th minute goal.
The centre back let the ball run under his foot onto the striker. Left in the clear, Carruthers picked his spot and slid his shot wide of keeper Scott Howey.
The home side didn't look remotely dangerous. That is, until the 85th minute when United failed to clear their lines leaving Astafjevs to fire home.
Three minute's later Carlisle curled the ball into the top corner from a free-kick, and United had grasped defeat from the jaws of victory.
Within seconds of the goal, before the match had even re-started, Wayne Graves was sent off after protesting with the referee about the free-kick decision.
He had been booked 20 minutes earlier for a foul, and down to ten men the Iron were unable to carve out another opportunity to equalise.