Austrian Mario Matt took a firm lead in the event, clocking a time of 59.22secs to lead Germany's Felix Neureuther by a massive 1.14sec ahead of the 1300 second leg. Another Austrian, Manfred Pranger is third at 1.19 while his compatriot Benjamin Raich is fourth at 1.23.
The zig-zag layout and less than perfect visibility had prompted officials to lay black markers on the snow at each slalom gate to allow skiers to see better.
But that had little apparent effect. As well as Byggmark, Swiss racer Daniel Albrecht, American Ted Ligety, Canadian Thomas Grandi, Austrian Rainer Schoenfelder and American Bode Miller were among the racers who did not get to the finish line.
Byggmark, who emerged as a gold medal favourite following his two slalom wins at Kitzbuhel last month, was disappointed at failing to finish especially as he was leading Raich, the first out the gate, in the top part of the course.
But the 21-year-old added: "I'm young, and there will be more world championships for me in the future."
Aksel Lund Svindal, the winner of two gold medals in the downhill and giant slalom, also fell victim to the tough Olympia course which had been set out by a Swedish coach who works with the Canadian men's slalom team.
Sweden's only medal hope for what is the final individual race of the competition before Sunday's team event, composed of men and women skiers, is Markus Larsson.
Larrson is however 1.34secs off the pace of Matt. Matt was last crowned world slalom champion at Sankt Anton, Austria in 2001, when he also took silver in the combined.
He is now a strong position to end his personal six-year victory drought at the world championships, and hand the Austrian men their first title of the 2007 competition.
"I had a perfect run, and just let my skis go," he said. "The visibility wasn't so good out there but I'm hoping I'll have just as clean a run in the second leg. I'm going to have to take all the risks."