Exhausted loop devices

Trying to mount using loop device prints

 mount: could not find any free loop device

See why devices are busy

 losetup -a

And probably free one

 losetup -d /dev/loop5

or all

 for f in /dev/loop*; do losetup -d $f; done

You can increase number of available devices.Create /etc/modprobe.d/loop

 options loop max_loop=64

and reload loop module (free all loop devices beforehand)

 rmmod loop
 modprobe loop

This will make devices appear automatically.
Newer kernels (2.6.21+) use a dynamic allocation of loop devices,so you will only have to create the filesystem representations:

 for ((i=8;i<64;i++)); do
   mknod -m 0600 /dev/loop$i b 7 $i
 done