Thommo sails home
Thompson, who has been based in Lennox since November, was the best-placed Australian as Greg Bennett's Olympic dream vanished.
The main goal for Australia at Vancouver was to make the top eight in the men's country rankings, which would have meant three starters at Beijing.
But Bennett and Brendan Sexton, the two keys to Australia improving from ninth spot, had below-par races and could not overhaul the United States or Russia.
It means Bennett will miss out on a second-straight Olympic berth, with early nominations Brad Kahlefeldt and Courtney Atkinson to race at the Games.
While Australia is a long-time powerhouse in the sport, it has been unable to win an Olympic gold medal.
The failure to have three starters in the men's race is a major embarrassment for Australian triathlon.
Bennett intentionally chased big-money races in the United States last year at the expense of accruing international ranking points and said it was his job to qualify his berth.
But he had an off day in the cold conditions, finishing 24th, while Sexton was 37th.
Thompson, who finished 10th at the Athens Olympics in 2004, finished behind in-form Spaniard Javier Gomez who claimed his first senior world title.
Only last month, Thompson had won the Byron Bay Triathlon and had declared his intention to place well at the World Championships after missing out on the Olympics.
Formerly of Canberra, Thompson had been training with the NSW Institute of Sport coach Justin Drew at Lennox.
Meanwhile, Australia had three top-10 finishes in the women's race as Helen Ducker of Great Britain shocked the field for her first world title.
New Zealand's Samantha Warriner outsprinted Australian Olympic team member Erin Densham for the bronze medal.
Fellow Australian team member Emma Moffatt, who was also based at Lennox Head for a short time, was fifth and compatriot Felicity Abram took sixth.
Defending champion Vanessa Fernandes of Portugal was the red-hot favourite, but she struggled in the cold and was 10th.