The Finn's Seat Ibiza left the road at junction No 5 of the Dooghary stage. Initial reports suggested that his co-driver, Paavo Lukander, and some spectators, had been hurt. But none of the injuries were believed to be life-threatening.
The drama continued on the second stage, where it was reported that the British Championship leader, Tapio Laukkanen, and his Renault team- mate and title holder, Martin Rowe, had gone out of the rally.
It emerged that four people, including Lukander, had been taken to hospital, with three spectators suffering from leg injuries. Lukander had cuts to his head, while Gardemeister was believed to be unhurt.
Gardemeister's exit from the event was in direct contrast to his superb recent performance in the New Zealand Rally, where he finished third without when making his World Championship debut for Seat.
He has been one of the revelations of the British Championship series and coming into this event was third in the standings after three successive podium finishes.
It meant that after stage two the trio heading the title chase were all in trouble, with Rowe also definitely out and Laukkanen's chances hanging in the balance.
Rowe was reported to have got stuck in a field, while Laukkanen finished the stage on three wheels.
A competitor who started the stage four minutes behind Laukkanen on the road reported he had been held up by the Finn, which will have left the man who has dominated this year's series well off the pace even if his car can be fixed after stage two.