But they botched their fourth dive and dropped to fourth, where they eventually finished with 454.65. They were in position to give the host country its first gold of the games — and first in diving — but they couldn't recover from their error.
"It's the worst place to finish at the Olympics," Waterfield said. "I would have rather finished last because then at least you know you've missed every dive."
The crowd, so raucous before the competition and through the early rounds, gasped when Daley and Waterfield missed on a reverse 3½ somersault tuck.
Both men were out of sync in opposite directions and resembled a V entering the water instead of being in vertical positions. Their mistake allowed the Chinese to regain the lead for good.
Daley kicked his feet too early and slightly under-rotated, while Waterfield kicked too high, over-rotated and created a major splash.
"Unfortunately," Waterfield said, "that left us with too much to do in the last two rounds."
Follow Paul Newberry on Twitter at www.twitter.com/pnewberry1963
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.