The Astana rider lost 5:19 to Nairo Quintana, who jumped up to second overall, pushing López down to fifth. Then, after the stage, López was also penalised a further ten seconds by race judges for an illegal hand-sling from Astana teammate Jakob Fuglsang.
The penalty pushes him to 4:09 down on race leader Primož Roglič (Jumbo-Visma) and 27 seconds behind Tadej Pogačar (UAE Team Emirates), who lies in fourth overall.
After the wind-hit stage which saw Quintana infiltrate the break, the Colombian is now 2:24 on Roglič, with his Movistar teammate Alejandro Valverde third at 2:48.
López and Fuglsang were both penalised 10 seconds in the official results for the hand-sling during the high-speed stage to Guadalajara, with race judges using the Video Assist Referee and television images to identify the infraction during an intense moment of the stage and the pursuit of the break. They were also fined 500 Swiss francs.
The Astana team was forced to join in the chase of the Quintana attack towards the end of stage 17 after Movistar's pace setting saw Roglič run out of teammates. Despite their work, the time gap was still over five minutes at the finish, meaning López's podium hopes had already taken a hit before the time penalty.
Hand-slings are legal in the two-rider Madison event on the track but are illegal in road racing because they can give a rider an unfair advantage and cause crashes.