What are some of the good references to understand loopy belief propagation and the need for it? I am looking for both theory and applications (for instance in coding/information and learning theory).
The following tech-report (a simplified version of an earlier paper by the same authors) on general BP (not only loopy-BP), but has fantastic insights. It's a great place to start, if you already haven't.
Another good place is this book: Information, Physics, and Computation - by Mezard and Montanari.