After Kevin Kouzmanoff was intentionally walked, Gregg threw a 1-1 fastball right down the middle and Blanks drove it into the seats in left-center, his seventh homer.
"I'll take it," Blanks said. "The part of the park I hit it to is pretty big out there. I was definitely hoping for it. When I saw it go out, I was definitely relieved."
It was Gregg's sixth blown save in 29 chances.
"I think we are going to make some changes as far as what we're going to do late innings," said manager Lou Piniella, who added that he'd say more on the subject on Tuesday. "We'll see what we do. I'm going to think about it tonight."
Piniella said it was among the Cubs' toughest losses this year.
"I can name a few of them, believe me. They all end the same way -- with a home-run ball."
Gregg sat at his locker with his head in his hands for about 10 minutes and understood why Piniella was upset.
"It's just making stupid mistakes," Gregg said. "Seeing something in a hitter and not executing it.
"The bottom line is getting people out," he added. "It doesn't matter how you do it. I could throw underhand. If they get out, I don't care. They hit three line drives and they're out, I don't care. The biggest thing is just getting people out and I didn't today."
Heath Bell (5-2) pitched one inning for the win.
The Cubs had taken a 1-0 lead when Derrek Lee tripled leading off the eighth and scored on Aramis Ramirez's single to left. The Cubs dropped to six games behind the St. Louis Cardinals in the NL Central.
Cubs left-hander Ted Lilly returned from almost a month on the disabled list with shoulder inflammation. He allowed four singles in six scoreless innings, struck out four and walked one.
Lilly was on a pitch count of 85-90 and ended up throwing 70.
Lee hit his second triple of the season, to left-center, off reliever Mike Adams, and came home on Ramirez's single to left. It was the first earned run Adams had allowed since June 16 against Seattle, a span of 24 innings in 24 appearances.
The Cubs failed to score after loading the bases against Kevin Correia with two outs in the sixth. Milton Bradley doubled with one out before Correia issued consecutive two-out walks to Aramis Ramirez and Jake Fox. Correia got out of the jam when Mike Fontenot flied out to left.
Fontenot, the Cubs' second baseman, made a nice diving stop of Adrian Gonzalez's grounder in the sixth to start an inning-ending double play.
San Diego failed to get a baserunner past second.
Correia also went six innings, allowing three hits.
OF Donavan Tate, the third pick overall in the June amateur draft, agreed to a deal with the Padres worth approximately $6.25 million. He's scheduled to take batting practice on Tuesday. Tate had planned to play baseball and football at North Carolina before signing with the Padres. He is the son of former NFL running back Lars Tate. ... Padres CEO Jeff Moorad pledged $10,000 on behalf of the Padres Foundation to assist with travel costs for the parents of the Park View Little League team from suburban Chula Vista, which advanced to the Little League World Series in Williamsport, Pa., on Sunday night.