Wallace, the Seahawks back-up quarterback, threw two touchdown passes to fullback Leonard Weaver, one each in the third and fourth quarters.
Niners tight end Vernon Davis was sent to the locker room by Singletary after getting called for a personal foul in the second half.
In the midst of all the chaos, Shaun Hill hit Jason Hill for a 2-yard touchdown pass with 9:57 left in the fourth.
Hill also lead the 49ers down the field at the start of the third quarter for a 14 play, 56-yard drive that ended in a 40-yard Joe Nedney field goal.
Hill replaced O'Sullivan for the final play of the first half after O'Sullivan gift wrapped a 'Pick 6'... hitting Seattle cornerback Josh Wilson in stride, who took it 75-yards the other way enroute to a 17-point Seahawks halftime lead.
The 49ers got on the board in the second quarter after 13-straight points by Seattle with a 42-yard field goal by Joe Nedney.
Earlier in the second quarter, Seattle scored on a 1-yard TD dive by T.J. Duckett.
Seattle put up six points in the first quarter with two Olindo Mare field goals.
O'Sullivan fumbled twice. One was retured 50 yards by Patrick Kerney after the Niners were in scoring position deep in Seattle territory. O'Sullivan also fumbled on the Niners' first possession, but San Francisco recovered before punting two plays later.