The centre-half had already been booked for a high challenge on Shane Long before stupidly challenging goalkeeper Adam Federici as he made a clearance.
Warnock said: "You don't always get what you deserve in football but we were the better side with 11 men.
"You don't often come to Reading and out-play them but we did and I have learned a lot about the players tonight.
"You can say that the red card cost us.
"We defended really well. Damion's first booking is never a booking in a million years. He never took his eye off the ball.
"But the second one was his own fault. What was the goalkeeper going to do other than kick the ball?
"He must have launched 100 kicks tonight so it was silly and he let his mates down."
The visitors were dogged in the second period as they looked like shutting out the hosts until Sigurdsson tricked his way into the area and hit the ground under a challenge.
Rangers defenders were furious with the decision but Warnock was unusually calm.
"At Liverpool it's a penalty, at Reading it's a penalty," he added.
"If you leave your foot out as a defender, you are inviting the foul.
"I thought it was the wrong decision but 90% of referees would give it.
"But we had four or five opportunities when we could have gone down and you wonder whether I have to coach my players to go down."
Reading boss Brian McDermott admitted he was just happy to pick up three more points after Sigurdsson's late strike.
The home crowd - whose expectations have been raised by the recent upturn in fortunes - were growing frustrated as the second half wore on but will have left happy after the Icelandic midfielder hammered in his 13th goal of the season.
McDermott said: "I thought it was a good game.
"There were two honest sides out there both having a real go and we were fortunate to get the result.
"The crowd were getting frustrated. We were playing against a resilient side and it is not going to be easy to break them down but we saw it out in the end.
"We have won eight out of nine now. It wasn't the most beautiful game of football but we got the result and that was what it was all about."
Source: Team Talk
Source: Team Talk