I had the same issue. Edits to the boot menu and Ctrl + alt+ del did nothing to stop loop. Then as a last ditch hope tried to do another repair install but this time with a Win Xp SP2 disk as the first disk i used was SP1 only and the machine was setup with SP2.

The repair has not copied required files and rebooted to finish the setup. Whilst its still setting up I no longer seem to be in the Safe mode loop.

Give that a try and let us now how it goes.