Nadal, seeded fourth, remained on course for a showdown in the final against No. 1 Roger Federer. No. 2 Novak Djokovic and No. 3 Andy Murray lost their opening matches.
Nadal held a set point in the tiebreaker Sunday but let it slip away, losing the final three points. But after losing serve early in the match when he double-faulted on break point, Nadal held his final 11 service games.
Story continues below ↓advertisement | your ad hereThe Spaniard had 29 winners and only 26 unforced errors.
Nalbandian, a former top-five player mounting a comeback from hip surgery, fell to 6-2 this year.
© 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Pep promises attacking intentDavis Cup: Argentina beats Sweden 3-2