We present an experimental study of quasiperiodic transitions between a highly ordered square-lattice pattern and a disordered, defect-riddled state, in a circular Faraday system. We show that the transition is driven initially by a long-wave amplitude modulation instability, which excites the oscillatory transition phase instability, leading to the formation of dislocations in the Faraday lattice. The appearance of dislocations damps amplitude modulations, which prevents further defects from being created and allows the system to relax back to its ordered state. The process then repeats itself in a quasiperiodic manner. Our experiments reveal a surprising coupling between two distinct instabilities in the Faraday system, and suggest that such coupling may provide a generic mechanism for quasiperiodicity in nonlinear driven dissipative systems.