The latest withdrawal, that of Jenny Champion and her mount Freckles, means chances of team honours at the Games are difficult, as there could be no discard time. Susan Reid withdrew from the team on July 13.
The withdrawals centred around both riders failing to see their first-choice grooms selected.
Ellis said officials from ESNZ's High Performance programme had talked with Champion over the past three weeks in a bid to resolve the dispute.
"ESNZ High Performance had informed Endurance HP squad riders in 2009 that all grooms would be subject to a selection process and that selected riders would not automatically be granted the groom of their choice," Ellis said.
"This decision was based around the importance of support crew during the actual race, in addition to normal 'groom' duties.
"On this basis, grooms working with squad riders during the 2009-10 season were requested to undertake their own Individual Performance Plans (IPPs) in a similar manner to the riders."
ESNZ's new high performance approach - communicated to senior endurance riders during July 2009 - required that each discipline analyse every aspect of their competition and seek to find ways of improving final performances.
"Endurance had identified the need to improve vet gate times and the performance of grooms/strappers was viewed as critical to this."
Squad riders and interested grooms were asked to submit expressions of interest to be considered for WEG selection early in the 2009-10 season, Ellis said.
This followed the establishment of a long list of qualified and partially qualified rider/horse combinations.
Ellis said ESNZ wrote in June this year to all grooms who had previously submitted an expression of interest to clarify the process for appointments and requesting that each submit a CV for consideration by the endurance selectors.
There were more applicants than positions and the selectors considered all applications before announcing their decisions on July 8.
Subsequent correspondence from Champion and Reid indicated they wanted to challenge the decision of selectors over their number one grooms.
Reid subsequently withdrew from the squad in mid-July.
Further talks with Champion resulted in a meeting in Wellington on July 23 with the intention of resolving the matter.
"During the meeting Miss Champion confirmed her intention to withdraw from the team unless the selectors' decision with regard to the groom appointments were changed," Ellis said.
Sue Reid and Makahiwi Achilles
Specific attention was given to the reasons for the non-selection of first-choice grooms for Champion and Reid.
"It was agreed that communications of plans for grooms at the Games could have been improved but that this would not have impacted the decisions which had been reached.
"It is strongly believed that all riders and grooms were aware of the process which had been agreed several months in advance," Ellis explained.
"With all relevant information received, and hearing all parties involved, ESNZ high-performance officials had confidence in the process that had taken place; that it was suitably robust and that the reasons for the appointment of selected grooms were valid when considered within the context of performance targets for the Games."
ESNZ told Champion it supported the decision of the endurance selectors, believing that they had carried out an open and fair appointment process.
Ellis said ESNZ wanted to clarify that Champion was offered the "number one groom" (Shane Dougan) she had requested as her first-choice groom on three previous occasions during the 2009-10 season.
ESNZ officials, including at board level, had subsequently spoken to her on several occasions to try to ensure the continued participation of her combination at the Games, Ellis said.
"Subsequent to this decision being transmitted, ESNZ was formally notified by Jenny Champion on Monday, August 2, that ESNZ were to accept her previously received written withdrawal from the team."
Ellis said ESNZ was disappointed at the outcome, as Champion and Reid are highly experienced and respected endurance competitors, with both also recent national 160-kilometre champions.
"However, ESNZ defends the groom selection process and its right to determine such a process as part of an overall objective to improve endurance performances at the Games and World Endurance Championships," he said.
Three endurance combinations will now represent New Zealand at next month's World Equestrian Games.