Sorry if I cant add much infos, but I had the same issue on lucid a few
days ago. Ps -ef would show all the loop devices (8 of them as far as I
can remember).

If that helps chris, vmbuilder wont work as long as those loop devices
are used - but if you reboot (I know...) it will clear the loop devices
and vmbuilder will work. Just don't ctrl+c too much when running
vmbuilder as long as this isnt solved...

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vm-builder 0.12.3-0ubuntu1 crashes and causes loop devices to be stuck
https://bugs.launchpad.net/bugs/583530
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