Guernsey lost openers Josh Butler (13) and Lucas Barker (1) cheaply as they reached 20-2 off four overs.
But they rallied well as Nightingale and his brother Ollie put on 49 for the third wicket before the latter was run out for 8 to leave Guernsey 69-3 off 11 overs.
But Nightingale and Damarell had an excellent fourth-wicket stand of 73 before Nightingale was caught for 75 off 51 balls after hitting nine fours and two sixes to leave Guernsey on 142-4 off 17.5 overs.
Damarell was dismissed for a 27-ball 45 an over later as the Sarnians reached 165-6.
Forshaw bowled Papuan opener Peter Karoho (7) midway through the fourth over to leave the visitors on 22-1.
But fellow opener Sese Bau and Boio Ray put on what proved to be a match-defining second-wicket stand of 99 before Josh Butler bowled Ray for 46 to leave Papua New Guinea on 121-2 off 14 overs.
Bau went on to make 85 off 52 balls, including 13 fours and two sixes, before being caught by Damarell off Forshaw’s first ball of the 19th over.
Forshaw then trapped his replacement Kipling Doriga lbw with the very next ball to leave the visitors on 159-4.
But Papua New Guinea were able to see the game out to clinch the win.
