Might possibly be a Disc error. If you legally own a Windows 7 disc, try downloading a third party Windows 7 ISO and burn it.
I've had this issue before in the past, tried a different Disc of Windows 7, ran the setup and everything ran fine.
And to REALLY prevent hangs & loops, be sure to Format the Partition you're planning on installing Windows 7 on. If you're doing a "Custom Install" to over-lap a previous version, the ALREADY installed version may be interfering/counter-acting the NEW install.