Hometown veterans Nicky Barmby and Dean Windass scored in the first half to put the Tigers on track for a place at Wembley but referee Kevin Friend was involved in two incidents which incensed the home crowd.
He disallowed a fourth-minute goal by
Danny Shittu for an alleged challenge on goalkeeper Boaz Myhill before sending off Eustace on the hour mark.
Eustace was involved in an altercation with Hull skipper Ian Ashbee and Brown insisted that there was a headbutt from the Watford player.
Boothroyd confirmed he will appeal the decision to dismiss Eustace and insisted that the tie is alive.
Defeat extended Watford's dire run of form to one win in 15 but Boothroyd insisted that the referee's performance was crucial.
He said: "At 2-0 with the home leg to come I would imagine it is fair to say that is advantage Hull.
"We played very well, as well as we have for a long time, but defensive lapses and decisions have cost us.
"The goal was a goal. The only person pushing was the Hull goalkeeper so I cannot understand why he disallowed it.
"With the sending off we have a situation where the Hull players are more experienced than the referee and they've talked him into a red card.
"The ball's on the floor, there are bodies around and he's gone for the ball.
"I will appeal the red card and we'll have to see what happens before Wednesday."
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