Neuville and erstwhile event leader Jari-Matti Latvala both encountered problems on Saturday afternoon.
The Volkswagen driver began the second loop of stages with a 14.8-second advantage over Neuville, but things soon went awry on the Stein & Wein test when his co-driver's door failed to close.
He then made slow progress through the 26.5km stage before coming to an abrupt halt after hitting an obstacle that resulted in his retirement.
The Finn will return for Sunday's two stages under Rally2 conditions.
His misfortune temporarily promoted Neuville into the lead of the event - ahead of Sordo - but a malfunctioning exhaust and a fencepost lodged under the Belgian's M-Ford Fiesta resulted in him losing time through the Peterberg stage.
It now means that Sordo has a slender 0.8s advantage over Neuville going into tomorrow’s final two stages as this afternoon’s Panzerplatte was cancelled due to the fatal crash earlier in the day.
Behind the top two, there is a 1m27.6s gap to a downcast Mikko Hirvonen, who bemoaned the slippery conditions he faced during both stages.
Martin Prokop is next of the best WRC runners in fourth, with Robert Kubica now fifth overall after trading quickest times this afternoon with Elfyn Evans in WRC2.