Mainline loop is buggy beyod belief (and so was SuSE's last time I looked).
Can you try to reproduce that error with this loop crypto package:
http://mail.nl.linux.org/linux-crypto/2002-10/msg00015.html
Twofish cipher in the 'ciphers' package is SuSE compatible with appropriate
mount option. Read README files in the tarballs for more information.
Regards,
Jari Ruusu <jari.ruusu@pp.inet.fi>
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