Caruso (Ash Seward Motorsport Alfa) started the race from pole after being promoted to 10th in the final classification of yesterday's opener due to post-race penalties.
After withstanding early pressure from Will Brown (Melbourne Performance Centre Audi), Caruso settled into what looked to be a comfortable lead as the 21-lap race wore on.
However with four laps to go telltale puffs of smoke began to appear out of the Alfa's exhaust pipe.
Caruso pushed on for another two laps before the car rolled to a stop on the side of the back straight.
That promoted Brown into the lead, although he didn't have it for long. MPC Audi teammate Jay Hanson, who had made excellent early progress from eighth on the grid to work his way into the top three, mounted an immediate challenge for the lead.
The two Audis went through Turns 1 and 2 side-by-side, Hanson left well positioned to execute a race-winning move on the run to Turn 3.
"This one means a lot," said Hanson. "To do it from eighth on the grid... these reverse grid races haven't worked out well throughout the year so to come first in a reverse grid, I'm stoked.
"[Brown and I] had a really good battle out there. We went two-wide through [Turns] 1 and 2 and then he was rubbing into me down the straight, which was cool. Both cars are clean, they're both quick, so bring on the last race."
Caruso, meanwhile, was left to hitch a ride back to the pits with Brown.
"Three or four laps before we were dropping power and the oil temperature was going through the roof," he explained.
"I actually thought we'd make it, but that was probably the optimist in me.
"Heart-wrenching. Not just for me, I've been fortunate enough to be successful in my career, but for our sponsors and for [team boss] Ash [Seward]. Everyone in the team has been working hard."
Caruso's retirement promoted Luke King (Moutai Hyundai) onto the bottom step of the podium ahead of Jordan Cox (Garry Rogers Motorsport Peugeot).
Series leader and Race 1 winner Tony D'Alberto (Wall Racing Honda) put in a solid drive from 10th on the grid to finish fifth from Zac Soutar (Team Soutar Motorsport Honda), James Moffat (GRM Renault) and Michael Clemente (Michael Clemente Motorsport Honda).
HMO Hyundai pair Josh Buchan and Nathan Morcom rounded out the best 10.
The final race will take place at 4:10pm local time today.
