Ok, with this simple fix loop builds and loop works no worse than the
old shm/loop approach (better - it does boot).

However, both 2.4.44+ and this animal have the same and rather odd
breakage in loop-over-device.  Loop-over-file works fine, but loop over
device gives random crap on reads.  And no, it's not a problem with
underlying device itself - something happens in loop.c.

I'm going down right now, so I'll be back in several hours and will try
to debug it.  Hopefully by the morning I'll have a fix.