Murphy - the former world and UK champion - watched Walden recover from 4-1 behind to level at 4-4 before snaring the final two frames to finish matters off.
He will face John Higgins in the quarter-finals on Thursday night a year after he downed the Scotsman 6-4 in the last four of the invitational tournament.
The match ended in bizarre circumstances with Walden calling a foul on himself after his shirt touched the black playing a shot on the final blue.
Walden had needed blue, pink and black to forced a re-spotted black, but Murphy holed the blue to finally end the evening in his favour.
"I missed a cutback red and a black off its spot. Apart from that, I didn't feel like I did much wrong until the closing frame," said Murphy. "Ricky played brilliantly from 4-1 behind. In the end, if we ever needed to highlight the sportsmanship in our game..to call a foul on himself that no-one saw was just unbelievable.
"I have put a lot of work in over Christmas and New Year, but I had a lot of bad luck too. It seemed inevitable that Ricky would clear up to force the decider, but I can't believe what has happened. I feel for Ricky, but he will be back."
Murphy established a 3-1 lead against Walden at the mid-session interval without ever playing at the peak of the powers that helped him reach the final of this tournament a year ago.
A run of 79 saw the 2005 world champion trouser the opening frame of the evening before moving two frames clear after Walden somehow missed what seemed like a routine black late in the second frame.
Walden was the dominant force in the third frame, but could not maintain the momentum as a missed red with the rest in the fourth frame saw him squander a 35-1 advantage.
Murphy recovered strongly to move within three frames of the last eight aided by a wonderfully crafted pot on a red along the top cushion.
The match continued to fall away from Walden in the fifth frame as he botched his break-off shot to allow Murphy the chance to compile an immaculate 130 for a 4-1 advantage.
Murphy appeared to be cruising to a 5-1 lead, but he was penalised for running fractionally out of position holding a 41-0 advantage.
He jawed a tough cut on a red as Walden put together his best break of the night by some margin as a 55 clearance to the pink helped him claw back to 4-2 adrift.
Murphy suffered a spot of déjà vu in the seventh frame as he broke down on 47 after his attempt to split the reds from the blue failed.
Walden responded with a 49, but Murphy blew another chance to regain a three-frame advantage as he inexplicably missed a cut on a green after swerving the white to hole the final red.
Walden cleared to the pink to close to within one frame of his opponent to trail 4-3.
Murphy began the eighth frame by ramming in a plant on a red only to miss a fine cut on the black by some distance.
Walden was clearly warming to the task as he ran in 65 to draw level at 4-4.
The Chester man was first among the balls in the ninth frame, but could not make a telling contribution with a 43 and 38 from Murphy enough to halt the Walden winning run.
Murphy finally stumbled over the line by claiming the tenth frame. Walden managed to find the snooker he needed after Murphy missed a simple black, but the tomfoolery continued on the colours.
"It is hard to take consolation from that performance." said Walden. "I was poor from start to finish.
"When I got to 4-4 and I was among the balls, I felt comfortably that I was going to win the match. But I run out of position and had a couple of good chances. I just couldn't keep my foot on the pedal.
"I've let Shaun off the hook many times in the game. It is really disappointing."