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Massu said he could not put his finger on what wrong for him in the final.
BBC: Sanchez lands second title
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"This loss hurts, particularly playing for your country, " said Massu, who committed 51 unforced errors.
BBC: France take shock Davis Cup lead over Spain
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Double Olympic gold medallist Nicolas Massu reached the semi-finals with a 6-2 7-6 win over Bohdan Ulihrach.
BBC: SPORT | Tennis | Henman loses out in Switzerland
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Second seed Massu was also seeking his second title of the year, but came up short against Sanchez.
BBC: Sanchez lands second title
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Massu will play David Nalbandian in the semi-finals after the Argentine beat Germany's Rainer Schuettler 4-6 7-6 (7-5) 6-3.
BBC: SPORT | Tennis | Henman loses out in Switzerland
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The American came through 6-4 6-4 to set up a meeting with either Nicolas Massu, Mario Ancic or Raemon Sluiter.
BBC: SPORT | Tennis | Srichaphan crashes out
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An out-of-sorts Massu had to wait until the sixth game to hold a serve before Murray claimed the first set.
BBC: SPORT | Tennis | Murray shines in Wimbledon opener
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Sanchez broke Massu's serve five times in the final and lost his own only once, and sealed victory by winning the last five games of the match.
BBC: Sanchez lands second title
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In the third, Massu had a chance to claw something back when he earned his first break point at 1-1, but Murray nullified the threat before breaking him twice.
BBC: SPORT | Tennis | Murray shines in Wimbledon opener
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Defending Olympic champion Nicolas Massu of Chile was dumped out by number seven seed David Nalbandian, while Russian fourth seed Nikolay Davydenko went down 7-5 6-3 to Paul-Henri Mathieu.
CNN: Federer, Nadal and Djokovic cruise through
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In Coquimbo, the Czechs are in control of their tie after Ivo Minar, ranked 247 in the world, produced a major upset when hammering Chilean number one Nicolas Massu 6-0, 6-2, 6-3.
BBC: France take shock Davis Cup lead over Spain
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Gonzalez and Massu's gold rush provoked a surge of pride and patriotism back in Chile, which the pair could only get a true taste of when they returned home as national heroes.
CNN: August 19, 2012 -- Updated 1510 GMT (2310 HKT)