I've done some more testing with this as I was back at the observatory yesterday. Found spomething interesting (impatient readers can skip to tests 7-9)
I'm not using an RPI, my ASI is plugged into a HP elite desktop PC.
Test 1) Tried to take exposures before changing anything
Result: looping
Test 2) Re-arranged all USB plugs so that just the ASI was plugged into the front of the PC (4xUSB2.0 ports at front). Everything else plugged in at the back of the PC
Result: looping
Test 3) Removed all USB devices except the ASI and a wireless keyboard
Result: looping.
Test 4) Re-flashed the ASI with the 'compatible' firmware (v3). Repeated test 3 above
Result: looping.
Test 5) Repeat same test above with a different cable.
Result: looping.
Test 6) Tried a windows laptop and firecapture
Result: no looping.
All above tests were done at night in the observatory. It was a clear night, about 2degrees c. Ground frost and high humidity.
I decided to take the PC and ASI home with me back to where I live and hack around the next day.
Next day:
Test 7)Setup in living room, Same as test 3 above.
Result: No looping. I can take continuous 2sec exposures no problem. Left running for 30min, still working fine.

I've changed nothing here!! Except bringing the gear for a 1hr drive and into a warmer environment........
Test 8 ) Put the ASI into a plastic bag and into the freezer for 20min. Retry same test again
Result: Looping.

Camera reporting -8.00 deg c. Left running until temp reached 10, still looping. Stop-start indi. Still looping.
Test 9) Warm the camera up again to room temp.
Result: No Looping!! Camera reporting 19deg c. All working fine again
UPDATE
Test 10) Waited a couple of hours. Warm the camera up again to room temp.
Result: Looping.
It looks like the temperature is a red-herring.