Quoting James R Grinter,

[NFS loopback mounts]

> When I first encountered this in 1.1, we put it down to the same
> class of problem that rendered nullfs and unionfs useless for large
> amounts of multiple process disk access. (We tried loopback mounting
> nfs after failing with nullfs. It didn't help.)

There is a deadlock bug in this; it has been reported by several people,
and the manpage even warns you against using loopback NFS mounts. I have
several mails sitting in my mailbox providing me with more detail, so
I should get around to fixing it someday.

- Frank