It is long known that the best single-site coherent potential approximation (CPA) falls short of describing Anderson localization (AL). Here, we study a binary alloy disorder (or equivalently, a spinless Falicov-Kimball (FK)) model and construct a dominantly analytic cluster extension that treats intra-cluster ($1/d$, $d$=spatial dimension) correlations exactly. We find that, in general, the irreducible two-particle vertex exhibits clear non-analyticities before the band-splitting transition of the Hubbard type occurs, signaling onset of an unusual type of localization at strong coupling. Using time-dependent response to a sudden local quench as a diagnostic, we find that the long-time wave function overlap changes from a power-law to an anomalous form at strong coupling, lending additional support to this idea. Our results also imply such novel "strong" localization in the equivalent FK model, the simplest interacting fermion system.