TreeBreeze, I would guess this could be fixed by clearning temp files and cookies in IE, but before you do that (let me know if you've already tried), we should get a capture of what is happening on the wire. Go to http://www.httpwatch.com/download/ and install the basic version of httpwatch. In IE you can turn on http watch and it will show up at the bottom of the browser. Click record and then navigate to OLW until you get into your login loop. Once you're in the loop, save the httpwatch session and then private message me and I'll give you an alias to send the trace to.
Chris