This happened to me the other day.
I was reversing my software to 4.1 from 4.2 (loved and hated 4.2)....but anyway...this is how I got mine to work.
I had the same thing. Looped from hourglass to reset with the red LED and then hourglass. Forever and ever.
I did this.
I plugged the BB into my laptop with the USB cable. I then took out the battery and LEFT IT OUT. I ran the WIPE function from the JL_Cmder which can be found with a search. or go here
I wiped it 3 or so times. and then finally I tried to reinstall the 4.1 (or 4.2 or whatever you want) from the desktop and it seemed to work.
My BB works just fine now.