India took the first individual gold medal in its history on Monday and American swimmers won the most exciting contest so far of the Olympics by a finger-tip.
While sporting records abounded to thrill packed venues, a familiar shadow fell over the Games' third day when a Spanish cyclist became the first competitor to fail a drug test in China.
China had so far avoided the doping scandals that so tarnished the Athens Olympics four years ago. But the International Olympic Committee (IOC) announced Maria Isabel Moreno, 29, was caught taking the endurance-boosting EPO drug.
Moreno, who could now face a two-year ban and also miss the 2012 London Olympics, went home after the test that was taken before the Games' opening. The IOC plans 4,500 tests in Beijing.
India, the world's second most populous nation after hosts China, won its first ever individual Olympic title with Abhinav Bindra's gold in the men's 10m air rifle.
Like many winners in Beijing on Monday, Bindra needed a remarkable comeback, shooting a near perfect hit at the end.
"It's the thrill of my life. That's about it. I just went for it. I knew I was lying fourth," he said after a win that left China's defending champion Zhu Qinan sobbing with only silver.
American swimmer Michael Phelps needed a little help from his friends to pip France in the 4x100 metre freestyle relay and keep alive his dream of an unprecedented eight golds at one Games.
Again watched by U.S. President George Bush in the stands, Phelps left the U.S. team second after the first leg.
France looked sure to win when former record holder Alain Bernard led by half a body length with a lap to go.
So it took an astonishing comeback from American team mate Jason Lezak to beat the French by a finger-tip at the death.
A relieved and usually cool Phelps, 23, pumped his arms in the air and screamed for joy amid wild celebrations on the U.S. team whom France had boasted about "smashing" in the build-up.
"Jason finished that race better than we could even ask for," the usually cool Phelps said. "I was so fired up."
The Americans took nearly four seconds off the world record, a big margin in swimming. In all, five relay teams beat it.
"Experience prevailed over talent today, and I regret that," lamented Frederick Bousquet on a deflated French team.
Making yet more swimming history in the same race, Eamon Sullivan claimed the individual world record from Bernard when he led the Australian team off on the first lap.
JAPAN'S "PERFECT" SWIM
The event left Phelps with two golds, after he destroyed his own world record on Sunday to win the 400m individual medley.
He is still on course to beat Mark Spitz's 1972 record of seven golds in a single Games. And after six in Athens, Phelps needs only two more to have the most golds of any Olympian.
Also bringing the crowd to their feet in the shimmering pool venue, the most decorated Asian swimmer of all time, Japan's Kosuke Kitajima, justified his pre-race hype by shaving 0.22 seconds off the world record to win the 100 metre breaststroke.
Women swimmers were not to be outdone.
Australia's Libby Trickett was told by coaches to do what every woman hates -- build up her backside -- before Beijing due to a weakness in gluteal muscles. That paid off when she won gold in the women's 100 metres butterfly.
Zimbabwe's Kirsty Coventry had vowed to show her nation in a positive light in China despite its economic and political crisis. She did just that by shaving 0.20 seconds off the world record for 100 metres backstroke during her semi-final.
Then Rebecca Adlington won Britain's first Olympic women's swimming title in nearly half a century with a last-gasp victory in the 400 metres freestyle after being fourth at the final turn.
"I am so proud to be British," she enthused afterwards.
Georgian and Russian shooters have embraced warmly on the range despite their nations' fighting in South Ossetia.
And there were no political sparks flying either when Cuba took on ideological arch-enemy the United States in women's volleyball. Cuba crushed the Americans in straight sets then wished them best luck for the rest of the tournament.
By early afternoon on Monday, China still led the medal table with six golds to three for both the United States and South Korea. China came second to the United States in Athens and wants to go one better in front of its own people.
That would underline the message of growing economic and national might China is hoping to project through its hosting of a spectacular, no-expense-spared Games.
Chinese national pride has swelled with a jaw-droppingly lavish opening ceremony and early sporting triumphs. That has pushed into the background pre-Games criticism of its human rights record and stifling of anti-government dissent.
(Reporting by Beijing Olympic bureau; Editing by Nick Macfie)